Research & Insights

Mind the gender pensions gap

Insuring Women’s Futures, the task force set up by the Chartered Insurance Institute, released a report last year which found that the average pension wealth of women aged 65 is £35,800, just one fifth that of men the same age.

To compound the problem, women’s costs in retirement are higher than men’s on average, since they live longer, with over a million more female pensioners than male pensioners predicted by 2020. This isn’t just a problem for women, but a problem for all of us, since the practical and emotional costs of supporting a growing number of financially insecure female retirees will ultimately fall on society as a whole.

How has this imbalance come about? And more importantly, what can women do about it?

The pension gap is partly a function of the historic gender pay gap between men and women. Since men’s earnings are still on average higher than women’s, and most pension provision is earnings related (e.g. contributions to a workplace scheme are often set as a % of earnings), it is almost inevitable that women end up with less pension wealth by the time they reach retirement. Assuming similar costs of living, women will have less disposable income on average, and so usually end up saving less in other ways too. The recent introduction of auto-enrolment into a workplace pension for employees should help ensure that more women start pension savings earlier in life going forward, but of course those earning less than £10,000 a year, the majority of whom are women in low paid or part time work, will fall below the threshold for automatic auto-enrolment and may not know that they need to ask their employer to enrol them.

Women are also more likely to have a broken employment record, either due to caring for children or elderly relatives, or because their employment is less stable or they took time out to do other things. But many women aren’t fully aware of the consequences of time out of the workplace. Just a five year break from the workplace, aged 25, can leave you with a pension pot one third smaller than your male counterparts [1]. While taking that break might be the right thing for you to do, it is important not to overlook the financial consequences.

Less obviously, there’s still a surprisingly large knowledge gap too, with 52% of women in their late 20s saying they don’t feel confident in planning for their retirement, compared to just 38% of men [2]. A staggering 55% of women aged 30-49 admit they have not thought about how they will pay for their long term care [3]. In many ways this is not surprising – after all, these are the years when many women are focused on raising children, and then have to take on caring responsibilities for their own parents. Finding the time to think about themselves at all, let alone their financial future, can be very difficult. 

There are cultural issues at play too. Saving, historically, hasn’t been something that women have been overtly encouraged to focus on, since historically their partner, or perhaps their partner’s employer, would have taken care of them. And if a relationship breaks down, this can also lead to a considerable lack of resources in retirement. Nearly three quarters of those getting divorced do not even consider how any pension entitlements built up during the marriage should be divided, even though the couple might have had an agreement that one would support the other financially while raising children, for example. And many people don’t even know whether they would be entitled to any dependent’s pension if their partner died, because they haven’t discussed it.

If any of the above strikes a chord with you, and we know it does with many women, don’t panic. There are steps you can take to put a plan in place for retirement. Here are some tips to consider when thinking about your golden years:

Find out your state pension entitlement

The Money and Pension Service ( has useful information on pensions and retirement. You can find out how much your current pension entitlement is, from (for any state pension).

Make sure you have registered for child benefit, if you have children

Your state pension might be impacted by any periods spent caring for children, so it is important to make sure you have registered for child benefit, even if you don’t want to receive the payment. This means you will get national insurance credits to count towards your pension (see

Find out what workplace pension entitlements you have accrued

You can ask the administrators of any workplace pension schemes you may have been part of to tell you the current and predicted value of your pension entitlement. The government’s Pension Tracing Service ( can help you trace any missing information from schemes you may have been part of in the past, if you are struggling to track these down.

Talk to those close to you

This is an area where it really is good to talk – it’s vital to talk to your partner, if you have one, to find out exactly what their pension entitlements are, and how these might affect you. It might not be the most romantic topic, but it’s important to discuss how you will ensure both of you are covered in old age, and agree a fair split of any pension entitlements if necessary. Similarly, if you have adult children or other dependents, talk to them about your plans and theirs.

Find out whether you can contribute to a pension now

If you can contribute to a workplace pension, this is a good way to maximise tax benefits and any employer contributions  If you earn less than the £10,000 automatic threshold for enrolment, you can still ask your employer to enrol you and make contributions on your behalf, as long as you earn more than £118 per week (£6,136 per year). And even if you earn less than this, you can still ask to join a workplace scheme, although your employer is not obliged to make any contributions.  The government also helps as you would be entitled to tax relief on your personal contributions.  If a workplace pension is not an option for you (for example you work on a freelance or contract basis), you could consider a personal pension. Even if you’re not earning, you can pay up to £2,880 into a pension each year and still get tax relief, topping it up to £3,600.

Maximise your tax free investments

As well as pure pension products, you could think about maximising your tax-efficient allowances by investing in a long-term savings product such as an ISA. To maximise the opportunity to grow your money over the long term, you could consider a stocks and shares ISA – these are typically suitable for those who won’t need access to their money in the near future, say the next 5 years. Even as little as £20 a month invested now could make a meaningful difference to your future.  If you’re under 40, consider a Lifetime ISA where the government will add an extra 25% on top of your own contributions each year, although this is subject to limits and conditions on when you can take money out.

Engage the next generation

Above all, it’s crucial that we start educating the next generation to ensure they are equipped to make long term financial plans. One way to get your children to think about long term investing might be to invest via a junior ISA for them, which they can’t touch until they turn 18. Or you could even consider investing up to £2,880 per year in a child’s pension, which will be topped up to £3,600 via tax relief, to ensure they have at least some retirement savings when they get to 55. Either way, it’s important to get them thinking and talking about their financial future.


The value of investment products such as pensions, ISAs and junior ISAs can go down as well as up and you may get back less than you invested.


Please note the information, data and any references in this article were accurate at the time of writing. Please check the date of the content if you’re looking for up to date investment commentary or tax-year related information.


[1] Now: Pensions 3 April 2018. (based on mean salaries and minimum auto enrolment contributions)

[2] Chartered Insurance Institute: Securing the financial future of the next generation: the moments that matter in the lives of young British Women

[3] Chartered Insurance Institute: Securing the financial future of the next generation: the moments that matter in the lives of young British Women