Metis AM
While women’s freedoms have come a long way, there are still disparities between men and women when it comes to money.
Though equal pay and equal working rights have existed for some time, women are still having to play catch-up when it comes to their pensions. In fact, HMRC reports that women aged 55 – 59 have 48% less in their pensions than men of the same age, on average. AJ Bell estimates that this gap begins to form when women are just 28 years old.
Keep reading to discover what causes such a wide gender pension gap and how women and couples can ready their pensions for a comfortable retirement despite it.
The gender pension gap, explained
There are a number of factors that contribute to women retiring with less.
The gender pay gap
Though it is illegal to pay men and women different salaries for the same job, women still earn less than men on average – even if both are in full-time work.
The latest available data from the Office for National Statistics (ONS) states that the gender pay gap stood at 6.9% among full-time employees as of April 2025, down from 7.1% in April 2024.
While the pay gap is slowly decreasing, it has a cumulative effect on women’s earnings and, in turn, their pension contributions.
Having children
Women who desire to have a family must normally take a break from their career, even for a short maternity leave – though many take longer breaks.
Scottish Widows reports that:
- 58% of women at or near retirement have taken a career break compared to 12% of men.
- Women are 12 times more likely to take a career break to raise children.
- By age 55, 24% of women have been out of work for more than five years, resulting in an impact of up to £70,000 on their pension.
- As an example, a woman taking a five-year career break at 35 years old would reach 67 with a pension worth £512,000 – £69,380 less than if she had not.
While everyone’s career journey is unique, these figures demonstrate just how impactful having a family could be on a woman’s retirement plan.
This impact could be even greater if a woman maintains part-time work after having children rather than returning to work full-time.
Caring for elderly relatives
Both men and women take time off work to care for elderly relatives, but research suggests that women are disproportionately affected.
MoneyWeek reports that caring is directly connected to the gender pension gap. The 2021 Census revealed that 5 million people are providing unpaid care in England and Wales – 3 million of whom are women.
The report notes that on average, unpaid carers lose £522 a month in income, which has a knock-on effect on pension contributions and other retirement savings.
3 ways women and couples can prepare for a comfortable retirement
Though women are not to be blamed for the systemic faults that result in them retiring with a disadvantage, women and their partners can take steps to reduce the gender pension gap.
1. Women could pay in more than the minimum pension contribution
Although most people are automatically enrolled into a workplace pension, making the minimum contribution is often not enough for a comfortable retirement.
Increasing pension contributions voluntarily before or after a career break could significantly benefit women in retirement.
For example, Bestinvest reports that a pension with £300 a month paid in, as opposed to £100, could result in a pot worth £173,000 more after 30 years. This is based on various assumptions and may not be accurate for your situation, but it demonstrates just how valuable an increase in monthly contributions could be.
2. Partners in full-time employment can top up a woman’s pension
Most couples forget that individuals can pay into another person’s pension.
If a woman stops working to have a family or care for a relative, her partner may be able to step in and continue contributing to her pension, provided they do so in line with several important rules:
- Contributions to another working adult’s pension count towards the pension holder’s Annual Allowance, not the Annual Allowance of the person paying in.
- The Annual Allowance limits how much a person can pay into a pension tax-efficiently – as of 2026/27, it is £60,000, or lower if the pension holder has already flexibly accessed their pension or is a very high earner.
- Similarly, any tax relief on these contributions is applied according to the recipient’s marginal rate of Income Tax.
- If the recipient has no income at all – for instance, if they have completely stopped working – the maximum another person can pay in is £2,880 a year, which is topped up to £3,600 by automatic basic-rate tax relief.
Even if the partner is unable to match what was previously being paid in, topping up a loved one’s pension while they have stopped work could make a big difference when they come to retire.
3. Financial planning could help you prepare for a comfortable retirement
Financial planning can make a significant difference to your retirement plan, no matter whether you are a man or a woman.
Using cashflow modelling software, we can map out your financial future and adjust the projections based on your pension contributions and a number of other factors.
If it looks as if you’re going to fall short of your retirement expectations, our team can help you take steps as soon as possible to close this gap. And, if your life changes and you need to take a career break, we’ll be by your side to aid with the transition.
Email enquiries@metiswealth.co.uk or call 0345 450 5670 today to find out what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
Workplace pensions are regulated by The Pensions Regulator.
The Financial Conduct Authority does not regulate cashflow planning.
The content of this article was accurate at the time of writing. While information is considered to be true and correct at the date of publication, changes in circumstances, regulation, and legislation after the time of publication may affect the accuracy of the content.