• Standard Life analysis shows switching from full-time work to working part-time 3 days a week could lead to £119,000 less in retirement
  • Even ten years of part time work will result in almost £18,000 short-fall
  • Impact set to hit women and minorities hardest

New analysis from Standard Life, part of Phoenix Group, highlights the pension penalty facing part-time workers when it comes to preparing for retirement. The analysis found those working three days a week for an extended period were up to £119,000 worse off by the time they reach retirement.

For example, someone that began working full-time with a salary of £25,000 per year and paid the standard monthly auto-enrolment contributions (3% employee, 5% employer) from age of 22, would amass a total retirement fund of £434,000 at the age of 66*. However, if they were to switch to part-time (3 days a week) from the age of 35, it would result in a total pot of £315,000 at the age of 66** – £119,000 less than if they remained working full-time.

Even switching to part time for a shorter period of ten years comes with a sizeable pension penalty. Between age 35 and 45 those working full time will accumulate £44,400, while those working three or four days would accumulate £26,600 and £35,500 respectively over the ten-year period – a difference of almost £18,000 between full-time work and three days a week***.

Potential Impact of working part-time on retirement savings

Total retirement fund
If you were to work full time till 66 If you were to work part-time, 4 days a week from age 35 till 66 If you were to work part-time, 3 days a week from age 35 till 66
£434,000 £374,000 £315,000
  -£60,000 -£119,000

*assuming 3% salary growth per year, and 5% a year investment growth. Figures are not reduced to take effect of inflation. Annual Management Charge of 1% assumed. The figures are an illustration and are not guaranteed. Earning limits not applied.
**It is assumed from the age 35 in this example that the salary is changed on a pro rata basis for the number of days worked each week.
***When adjusted for inflation, of 2% over the period, the real value at age 66 is £181,000, part time 4 days 35-66 is £156,000 and part time 35-66 is £131,000. Working 5 days from age 35-45 would be £28,100, 4 days would be £22,500 and 3 days would be £16,900.

Gender and Ethnicity

With UK government data confirming significant differences in the percentage of people who work part-time depending on social factors like gender and ethnicity, these calculations highlight the extent of the challenge facing a society in which 23% of workers are part-time. Separately a recent study from longevity think tank Phoenix Insights found that 32% of women reduce their working hours for an extended period of time, reducing their earning potential and therefore their retirement pot.

Neil Hugh, Head of Workplace Proposition at Standard Life, said: "Making the decision to switch from full-time work to part-time work is a significant one and is often triggered by life events like having a child. The decision has an obvious short-term impact on people’s take home pay but the longer-term consequences for their retirement plans are often overlooked. The reality is that women are more than three times as likely as men to work part-time and it will often be women that have to think more carefully about whether they are on track for the retirement they want. At the Spring Budget the Chancellor announced that from September 2025 all working parents in England of children aged from 9 months will be able to access 30 hours free childcare a week, which should help those who want to stay in full-time work do so, however having children is just one of many reasons for the gender disparity – others include women taking on more caring responsibilities for adults and cultural norms in some parts of society."

There are steps people can take to minimise the impact part-time work can have on long-term finances. For example, it’s important to make sure you’re taking advantage of all the benefits that your pension plan offers. If your employer offers a matching scheme, and you can afford to do so, it’s worth making additional contributions so that your employer will match them. Additionally, if you have a partner, consider your retirement plans in terms of a household and the impact of working part-time could become less of an issue if you agree as a couple that one person will make additional provision."





James Ikin
07519 556776

James Merrick
Standard Life
07713 918949


Notes to editors:

1 Calculations assume the following:

Starting Salary £25,000
Starting Age 22
Employer Contribution 3.00%
Employee Contribution 5.00%
Investment Growth 5.00%
Salary Growth 3.00%
Annual Inflation 0.00%
Annual Investment Cost 1.00%

2 – Calculations are intended only for the sole purpose of providing an illustration regarding the projection of savings and pensions. They should not be used with the intention to give an accurate representation of real-world outcomes.

3 – Gov.UK, Full time and part time employment, September 2022

4 – Phoenix Insights, ‘Caught in a Gap’, in partnership with the Institute for Employment Studies, December 2022.


About Standard Life

  • Standard Life is a brand that has been trusted to look after peoples' life savings for nearly 200 years
  • Today it proudly serves millions of customers who come to Standard Life directly, through advisers and through their employers' pension scheme.
  • Standard Life is part of Phoenix Group, the largest long-term savings and retirement business in the UK. We're proud to be building on nearly 200 years of Standard Life heritage together
  • Our products include a variety of Pensions, Bonds and Retirement options to suit people's needs, helping our customers to invest and save for their future. We're proud to offer a leading range of sustainable and responsible investment options.
  • We support our customers on their journey to and through retirement with comprehensive, easy-to-understand guidance so they can invest in the right way for their needs, and plan a future they feel confident about
  • The value of investments can go down as well as up and may be worth less than originally invested.


About Phoenix Insights

  • People are living for longer. But longer lives are not yet always better lives. We want to change this.
  • Phoenix Insights is a new think tank set up by Phoenix Group to transform the way society responds to the possibilities of longer lives.
  • We use research to lead fresh debate and inspire the action needed to make better longer lives a reality for all of us. The core of our work is focused on financial security, work, and learning and skills. Reimagining longer lives means making changes in all these areas. At the heart of all our work, we are committed to reducing inequalities and building a society that enables all of us, not just the fortunate few, to live better longer lives.
  • Phoenix Insights is led by Catherine Foot, a leading research and policy specialist in longevity and ageing who was appointed as the Director of Phoenix Insights in June 2021.
  • Catherine has over 20 years of experience in the field. From 2015 to 2021, she was Director of Evidence at the Centre for Ageing Better. She has also held senior roles with The King’s Fund and Cancer Research UK. Catherine holds degrees from University of Cambridge and University College London.
  • The think tank is supported by an expert advisory committee including Baroness Camilla Cavendish, Rt Hon Amber Rudd, Lord Victor Adebowale, Professor Lynda Gratton, Professor Sarah Harper CBE and Baroness Ruby McGregor-Smith CBE.

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