The pension gap – Gender’s impact on retirement savings

Equal work for equal pay has been a concept that has been established, although not necessarily practiced, in the UK since 1970. 

Despite the drive to equalise pay between men and women there is still a clearly defined gender gap when it comes to pensions, some of which is historic, but is more likely connect to a range of factors that limit the amounts women save and invest.  

The figures paint a stark picture. Official figures show that men over 50 in the UK have an average pension pot of £84,205, compared to just £39,654 for women. 

Meanwhile a third of women have under £5,000 saved, and many do not know the size of their pension pot at all.  

Worryingly life expectancy for women in the UK is longer and many retire earlier than their male counterparts, which makes this gap extremely concerning given the potential financial insecurity it creates.  

Why does the gender pensions gap exist? 

The gap between men’s and women’s retirement savings is not the result of one single factor, but a combination of economic, social and policy issues, which cause the gap to widen over time. 

Some of the main reasons include: 

• The gender pay gap – As of 2024, women earned on average 13.1 per cent less than men. Lower pay means lower pension contributions, both from employees and employers.  

• Career breaks and part-time work – Women are more likely to take time out of the workplace for childcare or caring responsibilities and are also more likely to return in part-time roles. 

• Confidence with savings and investments – Research shows women are more likely to feel uncertain or lack confidence when it comes to financial decisions, which can hold them back from maximising their pensions or investment growth. 

• Divorce and separation – Only seven per cent of divorcing couples seek financial advice, and women are more likely to give up claims to a partner’s pension, despite entitlement.  

• Historic pension rules – Older women have been disproportionately affected by past State Pension rules, which left many with reduced entitlements compared to men of the same generation. 

• Fewer senior leadership roles – Men are still more likely to reach higher-paying roles where pension contributions are larger, leaving women behind in building long-term pension wealth. 

The cumulative impact of these factors explains why the pension savings gap begins at just 16 per cent in women’s early careers but can widen to more than 50 per cent by the time they reach retirement. 

How can we help

If you are concerned about your retirement savings, whether male or female, then it's important that you seek professional wealth management advice throughout your life.  As your circumstances change, so does your appetite for investment risk and your pension expectations.  

To make sure your pension strategy aligns with your retirement ambitions, reach out to Director, Andrew Tricker (andrewtricker@lfwm.co.uk).

*This blog post has been written by Lubbock Fine Wealth Management (LFWM). The opinions and views expressed are those of LFWM and do not necessarily reflect 
those of Lubbock Fine. All information provided in this blog is for informational purposes only and should not be considered professional advice. LFWM is not 
responsible for any actions taken based on the content of this blog.