How the gender pension gap affects women

How the gender pension gap impacts women’s retirement

What is the gender pension gap, and why does it start so early? From career breaks to caring responsibilities and part-time work, many of the factors that shape women’s pensions build up over a lifetime. Here’s how the gap widens, and what you can do to help close it.

What is the gender pension gap?

The gender pension gap is the average difference in pension wealth and retirement income between men and women. 

While the UK gender pay gap sits at around 12%, the gender pension gap is significantly wider. 

The TUC estimates that women retire with an average income that is 36.5% lower than men’s, while an Interactive Investor report puts the gap as wide as 46% for certain age groups.
 

What’s causing the gap?

As you might expect, the difference in pension income is partly driven by the gender pay gap. Auto-enrolment legislation requires qualifying employees and their employers to contribute a minimum of 8% of their annual earnings into a workplace pension. As women earn less than men on average, their pension contributions are also lower.

The pension gap starts early. By the age of 25 to 34, women already have 45% less pension wealth than men, largely as a result of lower overall earnings.

But the gender pay gap doesn’t tell the full story. Other factors also contribute to women’s lower pension wealth.

Life events

During their working lives, many women take time away from full-time employment to care for children or other family members. While some return to full-time work after a career break, others reduce their hours or move into part-time roles to balance unpaid caring responsibilities.

Gaps in employment can limit the amount women contribute to their pensions over time, which can further widen the pension gender gap.

Missing out on the auto-enrolment threshold

Auto-enrolment legislation doesn’t apply to workers earning less than £10,000 a year in the same way it does for higher earners. This income bracket accounts for as much as 36.3% of young women aged 18 to 22, according to the TUC. 

Lower-income workers earning between £6,240 and £10,000 can choose to opt into a workplace pension scheme, and if they do, their employer is obliged to make contributions. However, employers are not obligated to enrol employees automatically. As it’s down to the individual to opt in, workers in this income bracket are less likely to save for retirement. 

People earning less than £6,240 can also choose to join a workplace pension scheme, but their employer is not obliged to make contributions. 
 

Frequent job changes

Individuals with modest incomes - many of whom are women – tend to change employers more often. Frequent job changes can lead to multiple small pension pots, which can be harder to track and manage, increasing the risk that savings are overlooked or left behind.

The average woman’s NEST (National Employment Savings Trust) pension stands at £3,218 (compared with £4,924 for men). Having several pension pots can make retirement planning more complicated, as it’s harder to build a clear picture of retirement finances. Many people lose track of older pensions, with over £31bn currently sitting in unclaimed pension pots across the UK. 
 

National Insurance contributions

The gender pension gap doesn’t just apply to workplace pensions; it can also impact your State Pension entitlement. The amount of State Pension income you receive in retirement is linked to your National Insurance (NI) record. 

To qualify for the full State Pension, you typically need 35 qualifying years of NI contributions or credits. Some carers, such as women on maternity leave, as well as people claiming certain types of benefit, can receive NI credits while they are away from the workforce. However, as women are more likely to take career breaks for unpaid caring roles, many may find it harder to build a full NI record, which can impact the amount of State Pension they receive. 
 

How can women plan for a better retirement?

The gender pension gap is driven by factors beyond individual women’s control. But there are steps women can take to improve their long-term financial security. 

If you’re feeling concerned about your pension, here are some steps you could consider taking.
 

1. Check your contributions

Many of us assume that auto-enrolment contributions are enough for a comfortable retirement, but that’s not necessarily true. The minimum 8% contribution rate – comprising 5% of your earnings and a 3% top-up from your employer – was designed as a starting point rather than a target. 

You’re not limited to the default contribution amount; you can usually increase your own workplace pension contributions through your employer. Some employers may increase or match additional contributions. 

2. Increase your contributions after a career break

Even modest increases to your pension contributions can help you build back a healthier pension pot after taking time away from work. 

The sooner you start saving into your pension, the greater the potential for the value of your contributions to increase through compound growth (keep in mind that as pensions are investments, returns aren’t guaranteed; the value of your contributions could go down as well as up).
 

3. Consolidate your pension pots

If you have had more than one job, it’s likely you have more than one pension pot. MoneyHelper provides a helpful guide to tracing old or lost pensions. Once you’ve tracked them down, you could consider consolidating all your pensions into a single pot. This could make them easier to manage, help you build a clearer picture of your retirement savings, and support more informed financial decisions.

Before consolidating your pension pots, be sure to check each provider’s terms and conditions, as transferring could incur fees or result in losing out on benefits. 

4. Check your National Insurance records

Take a look at your National Insurance (NI) record to make sure you’re on track to receive the full State Pension. If there are gaps in your NI history, you may be able to make voluntary contributions to fill them in. 

If you’re taking maternity leave, you’re entitled to NI credits, which protect your State Pension entitlement while you’re away from work. 

It may also be worth claiming Child Benefit if you’re a parent– even if your household income is high enough to reach the Child Benefit High Income Charge threshold –  as this can protect your State Pension entitlement through NI credits. Just make sure you understand the rules, as higher earners may be required to repay some or all of the benefit in taxes.
 

5. Make the most of tax relief and employer matching

Many employers will increase their pension contributions when you raise your own; some will even match your contributions up to a certain limit. It’s worth checking if your company offers this employee benefit, as it can provide a valuable boost to your pension.

Whether you have a workplace pension or not, you can still save into a personal pension (or SIPP). Personal pension contributions benefit from tax relief. Basic-rate payers currently receive 20% tax relief, while higher-rate and additional-rate taxpayers can usually claim further tax relief on their self-assessment tax return. 
 

6. Explore guidance tools and financial advice

Many employers will increase their pension contributions when you raise your own; some will even match your contributions up to a certain limit. It’s worth checking if your company offers this employee benefit, as it can provide a valuable boost to your pension.

Whether you have a workplace pension or not, you can still save into a personal pension (or SIPP). Personal pension contributions benefit from tax relief. Basic-rate payers currently receive 20% tax relief, while higher-rate and additional-rate taxpayers can usually claim further tax relief on their self-assessment tax return. 
 

The more you understand about pensions, the better prepared you can be for retirement. 

Tools like our pension calculator can help you understand how much you might need to set aside for the lifestyle you want, while reputable financial websites like MoneyHelper.com provide helpful free resources.

Speaking to a financial adviser can also help you understand the best options available to you. 
There’s no denying that the factors contributing to the gender pension gap can be very challenging to navigate. While no single person can solve the gender pension gap alone, there are practical steps that many women can take to strengthen their financial circumstances in retirement. 

It’s never too early to start, and never too late to make changes to take control of your financial future. 

 

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The information here is based on our understanding in June 2026 and shouldn’t be taken as financial advice.

A pension plan is an investment. Its value can go down as well as up and could be worth less than was paid in.

Your own personal circumstances, including where you live in the UK, will have an impact on the tax you pay. Laws and tax rules may change in the future.

Standard Life accepts no responsibility for information on external websites. These are provided for general information.