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Experienced Independent Financial Advisers

Gender pension gap

19 Feb 2021

What you can do to reduce a future financial shortfall

A lot has been made of the gender pay gap, but what’s not so well known is how this can affect women in retirement. Unsurprisingly, women don’t fare as well as men when it comes to the savings they’ve built up for a healthy and economically stable retirement.

The gender pension gap, the pension savings gap between men and women, has closed to just 1% – the narrowest on record – as more women are putting enough money aside for a comfortable retirement. Almost three in five (59%) women are now saving adequately, compared to 60% of men.

Persistent pay gap exists
Despite this progress, the persistent pay gap and part-time working ratio means women saving adequately on the median wage are still saving £1,300 a year less than men, according to a new report[1].

This means that for a woman to save the same amount into her pension as a man, she would need to work an extra 37 years – which would take her over the age of 100 if retiring at State Pension age – a number that is likely to grow as the full economic impact of the pandemic is realised.

Compound interest benefits
Young women are among those struggling most to save for later life. Just 46% of those in their 20s are saving the recommended minimum 12% of salary. This compares to 56% of men the same age, and to almost two-thirds (64%) of women in their 50s, showing that women do tend to save more as they get older.

However, not saving more while young means women miss out on the benefits of compound interest, which can help savings increase substantially over their working lives. Women are more likely to take time out of the workplace to look after children or elderly relatives, which are the two biggest drivers in the gender pensions gap.

Top 5 pension tips:
1. Find out what you have got by talking to your employer or checking your pension statement. You can trace old pensions at
2. Check if you are eligible to join your employer pension scheme. It’s a great way to build up savings, with your employer paying in on your behalf too.
3. For many women short-term stability is the priority just now but if you can, try to keep paying into your pension, even if it’s the minimum for now, so your employer keeps paying too. It soon adds up.
4. Decisions like reducing hours or stopping working can leave you with less savings at retirement. If your income drops over time your partner may be able to pay into a pension for you to keep the finances balanced.
5. Claim child benefit – check if you are eligible on the government website. Going through the application process keeps your National Insurance contributions up to date, which you’ll need to claim the full State Pension at retirement age.

Saving enough for retirement
Also, the social structures of our families, workplaces, benefits systems and communities have an interdependent and negative impact on women’s abilities to save enough for retirement. As a result of the gender pay gap, in the vast majority of cases it is women who earn less than men.

Therefore, when decisions are made about who should stay at home to look after children it usually makes sense that the lower earner takes a career break. The fact that this is seen as the norm has an impact on women’s career prospects, despite their potential – and despite equal opportunities legislation.

Source data:
[1] The research was carried out online by YouGov Plc across a total of 5,757 adults aged 18+. Data was weighted to be representative of the GB population. Fieldwork was carried out
26 March – 11 April 2020. An additional survey was carried out online by YouGov Plc across a total of 2,251 adults aged 18+. Data was weighted to be representative of the GB population. Fieldwork was carried out 11 March – 12 May 2020.

Footnote: Our belief is that all finacial advice should be tailored to your particular needs and situation. The content of the articles featured in here are for your general information and use only; they are not intended to address your particular requirements or constitute a full and authoritative statement of the law. They should not be relied upon in their entirety and shall not be deemed to be, or constitute advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. Please get in touch to meet with us for a full consultation.

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