Why do women have less money in their pensions than men? Find out why we have a gender pension gap, and what you can do to improve your own retirement planning.
While progress has been made towards gender equality in the workplace, there is still a big disparity when it comes to retirement savings. Across the UK, women are retiring with substantially less in their pension pots than men. This issue, often referred to as the ‘gender pension gap’, can have long-term financial consequences and leave many women facing greater financial insecurity in later life.
In this article, we explore why women tend to have less in their pensions than men, the factors contributing to the gap, and what you can do to improve your own retirement prospects.
What is the gender pension gap?
The gender pension gap is the difference between the retirement savings and pension income accumulated by men and women over their working lives.
Research consistently shows that women in the UK have smaller private pension pots than men. This gap is often significantly larger than the gender pay gap because pension inequalities accumulate over decades.
The issue affects women across all age groups, although the impact is often most visible as they approach retirement.
Why do women have less in their pensions?
So why do women have less in their pensions? Here are five of the biggest contributory factors.
1) The gender pay gap
One of the biggest reasons why women have lower pension savings is the gender pay gap. Although this gap has narrowed over the years, women on still earn less than men today on average; as of April 2025, the gender pay gap stood at 6.9%.
The gender pay gap doesn’t just mean that women earn less than men each month now. Because workplace pension contributions are usually calculated as a percentage of salary, lower earnings mean lower pension contributions.
Over the course of a woman’s career, this can result in thousands of pounds less being invested for their retirement – and less opportunity to make the most of compound growth.
2) More women take career breaks to care for family
Research published in 2023 found that women are seven times more likely than men to be out of work due to caring commitments, such as raising a family and looking after relatives.
Unsurprisingly, this hits women in their 30s the hardest. The research discovered that one in 10 women in their 30s (more than 450,000 women) was out of the labour market because of caring responsibilities – compared to just one in 100 men in their 30s. This means that women in their 30s are 10 times more likely than men to be unable to work due to family commitments.
And it’s not just babies and young children that women give up their careers for. Women are also disproportionately more likely to provide unpaid care for older relatives, making up 68% of all family caregivers.
While women are away from the workforce caring for their family, they are missing out on auto-enrolment pension contributions, and likely to stop making any at all. And even relatively short career breaks can have a lasting impact on women’s retirement savings, as their pension investments lose valuable years of growth and compound returns.
3) Women are more likely to work part time
Women are more likely to work part-time, particularly during their child-rearing years. A UK labour force survey found that, between October and December 2025, 37% of women in employment worked part-time, compared with just 14% of men.
While part-time employment offers women – especially mothers – the flexibility they need, it usually results in lower earnings and therefore lower pension contributions. If you earn less than £10,000 a year, you will also be below the threshold for auto-enrolment. And while you can still request to be added, not many people are aware of this. As a result, as many as 75% of workers earning below the auto-enrolment trigger are not currently saving into a workplace pension.
4) Women earn less than men over their lifetime
As pension savings are often connected to salary, it’s not surprising that women are behind men when you consider that, on average, women earn less over their lifetime.
Women make up 65% of the 10 lowest-paid occupations in the UK, such jobs in cleaning, catering and care. And only 39% of women are working in the 10 highest-paid occupations, in industries like finance, law and IT.
The triple whammy of lower wages, career gaps and working part time all conspire to ensure that women end up with much smaller pension pots than men.
5) Women are less likely to make financial plans
There’s one more very important, but not often discussed, reason why women often end up with a smaller pension pot than men: we are less likely to make financial plans, especially for retirement.
According to the Money and Pensions Service, 60% of women have no plan for their money in retirement, compared to 44% of men. And just 41% of women say they understand enough about pensions to be able to make effective decisions about saving for retirement, compared to 57% of men.
It could be because we are relying on our husband or partner to make plans for us. Perhaps we have sacrificed our career for the good of our family, assuming we’d be looked after by our spouse. But this is a dangerous assumption.
What if your partner isn’t financially responsible or knowledgable and isn’t investing enough or wisely? What if you split up before retirement and don’t get any or enough of their pension pot (which sadly happens more frequently than it should)? And what if you stay together but find yourself having to ask for spending money in retirement, rather than having your own money to spend as you wish?
Even if you only build a modest pension pot for yourself, every penny you invest can grow over the years, and will help you be more financially independent in your later years.
How big is the gender pension gap in the UK?
The size of the gender pension gap varies depending on age, income level, and pension type. However, studies consistently show that women approaching retirement often have significantly less private pension wealth than men.
The UK gender pension gap of people aged 55-59 with uncrystallised private pension wealth currently stands at 48%. The gap is smallest at 22% for people aged 25 to 29, and increases to 52% for those aged 45 to 49.
The average private pension pot of men aged 55 to 59 is £156,000 compared to just £81,000 for women. And when you consider that, according to Retirement Living Standards, we currently need £13,900 a year as a single person, and £22,500 a year as a couple for a minimum lifestyle, and £32,700 and £45,400 respectively for a moderate lifestyle, this isn’t enough.
What can women do to improve their pension savings?
So what can you do if you are worried you don’t have enough saved for your retirement? Here are some things women can do to improve their pension savings.
Make the most of your tax benefits
There are good reasons why you should prioritise investing in your pension, and one of the biggest is to take advantage of the tax benefits of doing so.
If you are employed and qualify for auto-enrolment, your employer must pay into a pension for you (you can read more about it here). They may even match contributions you make on top of this. Even if they don’t, you still benefit as any salary you sacrifice for your pension is paid out before tax, which should reduce your tax liability.
If you are self-employed and a basic rate taxpayer, you’ll usually get a 25% tax top up on any contributions you make to your pension. So, for every £100 you invest in your pension, you could get another £25 from the government, making it £125.
If you are a limited company owner and make contributions to your pension through it, they are usually treated as an allowable business expense to be offset against your corporation tax bill.
The maximum you can pay into your pension each year and benefit from tax relief is £60,000 or 100% of your income or profit, whichever is lowest. If you have any unclaimed allowances from the past three years, you can usually claim this too.
Review your pension contributions regularly
It’s easy to prioritise spending or investing money elsewhere and overlooking your pension. But given the above tax benefits, and importance of saving for your retirement (plus the compound growth benefits of long term investing), it’s important to ensure you are putting away enough money if you can afford to.
I was able to grow my own pension dramatically from my late 40s by choosing to live more frugally now and paying as much of my company profits as I could into it. That doesn’t mean living in poverty, but keeping my lifestyle more modest than I need to, while still splashing out when I want.
My recommendation is to keep a track of your spending so you have a good idea of how much you need each month for your basics and essentials, and how much you are spending on nice-to-haves. You can then decide whether there is room to cut back and have more to invest elsewhere, such as your pension.
It’s also important to consider where any surplus money is going. For example, should you overpay your mortgage? Invest money in an ISA? Put money in Premium Bonds? Or spend or save elsewhere? I review my finances on a regular basis, to see if anything has changed, and if my investment strategy is working for me.
Track down any old or forgotten pension pots
Could there be any old pension pots from pervious employers you have forgotten about? According to the Association of British Insurers, there is more than £30 billion currently lying in unclaimed, lost or forgotten pension pots in the UK. That averages out at around £9,500 per person who’s lost a pension.
You can read advice here how to track down any missing pensions.
Try to keep up your pension contributions during career breaks
If you take a career break and can afford to, you may choose to continue your pension contributions. If you are at home raising your children, you and your partner may decide to divert some household income to invest in your pension.
The good news is that, if you are not working, you can pay up to £2,880 a year into your pension and the government will add £720 in tax relief.
It’s also important to keep up with your National Insurance (NI) contributions while you are not working as well. In order to claim the State Pension you need 10 years of qualifying NI contributions. And to claim the full State Pension you need 35. If you have any gaps in the past six years, you can fill them gaps (you can read more here).
Claim any National Insurance credits you are entitled to
As we’ve already covered, one of the big reasons why women end up with smaller private pensions is because we are more likely to take time off work to raise children or care for family. Another way this can impact us is missing out on National Insurance contributions for the years we are not earning, which can reduce our State Pension entitlement.
This is why it’s important to claim for any credits you may be entitled to, such as Child Benefit (make sure you claim in your name) or Carer’s Credit, as these can ‘plug’ your gaps for you.
If you haven’t claimed benefits because your household income was too high to qualify, you could still backdate a claim for your missing National Insurance credits via a new system the government is introducing in April 2027.
Get professional financial advice
And finally, if you don’t have a retirement strategy you are confident in, it could be worth getting independent financial advice to understand your pension position, identify gaps, and develop strategies for your retirement planning.
If you don’t feel ready for this, you can still do a lot to educate yourself and plan your own strategy. I recommend reading more of the articles on the Money section of our website. My goal is to help you get a thorough picture of retirement planning in easy-to-understand articles packed with practical advice you can act on. Like this one!
What can employers do to help close the gender pension gap?
Employers play an important role in reducing the gender pension gap. Here are some of the ways they can help:
- Supporting flexible working arrangements.
- Encouraging pension engagement among their employees.
- Providing financial wellbeing education.
- Reviewing pay and promotion practices.
- Offering enhanced parental leave policies.
- Ensuring equal access to workplace pension benefits.
These steps can help create more equitable retirement outcomes for all their employees.
What’s the future of the gender pension gap?
The gender pension gap is influenced by a range of social, economic, and workplace factors. While changes such as automatic enrolment have improved pension participation among women, achieving true pension equality will require continued progress in areas including pay equality, workplace flexibility, and support for carers.
Understanding the causes of the pension gap is the first step towards addressing it. By taking proactive action and planning ahead, women can improve their retirement prospects and build greater financial security for the future. Reading this article could be your first step.
