The Gender Pension Gap - what is it and what can you do about it?

It’s the difference between what men and women have saved for retirement, with the difference between men’s and women’s pensions and investments in the UK estimated to be around £680 billion.

How big is the gender pension gap?

The 2024 Gender Pension Gap Report found, women retire with average pension savings of £69,000, compared with £205,000 for men.

Women are also more likely to live longer than men, so those smaller pension pots need to stretch further. Some rely solely on the State Pension, which is currently a maximum of £230.25 per week.

Why does the gap exist?

The gender pension gap is linked to a few different things:

- Pay differences: Women often work in lower-paid sectors or take more part-time roles. Lower earnings usually mean lower pension contributions.

- Career breaks: Many women take time out for children, grandchildren or caring for relatives. These gaps reduce earnings, contributions and, ultimately, savings.

- Financial confidence: Research shows women are more likely to choose lower-risk pension options, which can mean slower growth

- Life events: Divorce, menopause and periods of illness can also impact earning power and long-term savings.

It’s a complex picture, but one thing is clear: women retire with significantly less.

What can you do about it?

Retirement may feel a long way off, especially if you’re juggling work, family and rising living costs. But even small steps today can make a big difference later.

There are some simple ways to boost your pension:

- Increase contributions with pay rises – When your income goes up, consider diverting part of that increase into your pension. It’s money you may not miss now but will 

   be grateful for later.

- Make the most of employer contributions – Check if your workplace scheme offers matching contributions. If they do, try to pay in enough to get the maximum match –   it’s essentially free money for your future.

- Improve your financial confidence – Research shows women are more likely to choose lower-risk pension options, which can mean slower growth. In fact, a study by    

  King’s College London found that men are twice as likely as women to hold stocks and shares, which typically offer greater long-term growth potential.

- Check your State Pension entitlement – If you’ve taken time out of work, you may qualify for National Insurance credits. These can help you reach the full State Pension 

   when the time comes.

Investing in stocks and shares

Investing in stocks and shares can be a smart way to grow your wealth over time. Unlike cash savings, which may lose value due to inflation, stocks and shares offer the potential for higher long-term returns. By spreading your money across a range of companies and sectors, you can reduce risk while giving your investments the chance to grow. Starting early and staying invested over the years allows compounding to work its magic, meaning even small, regular contributions can build into a significant retirement pot. With careful planning, investing in stocks and shares can help you achieve the financial security and lifestyle you’re aiming for in retirement.

A financial adviser can guide you through the options, helping you understand the risks and benefits, and build confidence in making investment decisions that align with your goals. With the right advice, investing in stocks and shares can play a key role in achieving the financial security and lifestyle you want in retirement.

Taking back control

The gender pension gap can feel daunting, but knowledge is power. Understanding how pensions work, how career breaks affect savings, and how small changes can add up puts you back in control.

Financial planning isn’t just about building a nest egg – it’s about creating freedom, choice and peace of mind. Whether your dream is early retirement, big family holidays, or simply knowing the bills will be covered, the right plan today can make all the difference tomorrow.

You don’t need to figure it all out alone. With the right guidance, you can feel confident that your pension and investments are working as hard as you are.

Some people feel more comfortable working with a female adviser who can better understand their personal circumstances. Our team would be delighted to support you.

If you’d like to speak with a Financial Adviser about your situation, you can book a no-obligation meeting here.