How to close the gender pension gap

Why do women retire with smaller pension pots than men? We explain the gender pension gap and share practical steps to improve your retirement savings.

By Caragh Medlicott

Created on: 28/07/2020

Updated: 05/01/2026

Reading time: 8 mins

Key takeaways:

Women, on average, retire with significantly smaller pension pots than men due to pay gaps, career breaks, and part-time work.
Maximising workplace pension contributions, protecting National Insurance records, and planning early can help to close the gender pension gap.
Tracking and consolidating pension pots could simplify your finances and boost your retirement savings, but do check for potential benefits you could lose by transferring before doing so.

Okay, so, you may already know about the gender pay gap – but did you know there’s a pension pay gap, too? That’s right — according to a report published in January 2024, on average, women retire with £136,000 less than men^{1 [p.24]}.

Put another way, women would need to work an extra nineteen years to retire with the same pension pot as men. Whew.

Of course, what this likely reflects is the general state of gender inequality in society. And while structural change is necessary for big-scale transformation, there are still personal actions you can take now to improve your financial future down the line.

In this blog, we’ll break down what the gender pension gap is, why it exists, why it matters, and – most importantly – what you can do to help close it. Let’s get started.

Jump to a specific section:

What is the gender pension gap?
What causes the gender pension gap?
Why the gender pension gap matters
How to close the gender pension gap: practical steps
Final thoughts

What is the gender pension gap?

The gender pension gap refers to the difference in pension savings between men and women. In the UK, this gap is alarmingly wide.

As of January 2024, women retire with an average of £69,000 in pension savings compared to £205,000 for men. That’s a difference of over 65% (66.34%).^{[1, p.24]}

This gap leaves many women facing financial insecurity in retirement, unable to maintain their desired quality of life. It’s a stark reminder of the financial challenges women face, often stemming from inequalities in pay, career progression, and the burden of unpaid caregiving.

What causes the gender pension gap?

As you would expect, multiple factors contribute to the gender pension gap. That’s why when it comes to improving gender equality, there’s no single “silver bullet” solution.

Ultimately, this gender disparity is the result of several interconnected issues. Let’s explore the main contributors:

Gender pay gap

In 2023, women earned, on average, 75% of what men did ^{[1, p.8]}. This 25% gender pay gap directly impacts how much women can contribute to their pensions.

Over a lifetime, the effect of earning less means smaller pension contributions, reduced compounding in pension growth and therefore a smaller pension pot.

Maternity leave and career breaks

Many women take time out of work to care for children or family members. In fact, 38% of women who have taken a career break were unaware of the long-term financial impact it would have on their pensions².

While (at present) maternity leave provides up to 39 weeks of paid leave, reduced income during this time often results in smaller pension contributions. Career breaks can also create gaps in employment, further reducing potential savings.

Part-time work

Women are more likely than men to work part-time, with 36% of women in part-time roles compared to just 14% of men³. Part-time work typically comes with lower salaries, which means lower pension contributions, too. Over time, this can have a significant effect on women’s pension savings – even if it’s not always realised until retirement.

Auto-enrolment threshold

The £10,000 minimum earnings threshold for auto-enrolment could exclude many women in part-time or low-paid jobs from workplace pensions.

Although you may have the choice to opt in manually if you earn less than £10,000, some people aren’t aware of this option (or may mean to opt-in further down the line, but ultimately forget to).

The end result? Less time spent saving for a comfortable retirement.

National Insurance contribution gaps

To qualify for the full UK State Pension (currently £11,973 per year), you need 35 years of National Insurance (NI) contributions. Career breaks can lead to gaps in your NI record, reducing the amount of State Pension you’ll receive in retirement.

Sectoral segregation

Women are overrepresented in lower-paying industries, such as hospitality, care, and retail. In fact, new research shows that 1 million more women than men work in low-paid jobs⁴.

Lower earnings in these sectors mean women are less able to save adequately for retirement.

Why the gender pension gap matters

The gender pension gap isn’t just a good example of gender inequality in society; it actually has real-world consequences for women (especially once they’ve reached retirement).

Here’s why we can’t ignore it.

Financial insecurity

Women live longer than men – on average, nearly four years longer – so they need their pension savings to stretch further⁵. However, with smaller pension pots, many women run the risk of running out of money for a reasonable standard of living in retirement.

Independence concerns

A smaller pension pot can lead to financial dependence on partners or family members. For single women – whether divorced, widowed, or never married – the risk of financial insecurity is even greater.

Poverty risk

Two-thirds of pensioners living in poverty are women. Half of these women are single, highlighting the additional challenges faced by those who don’t have a partner to share financial responsibilities with ^{[1, p.24]}.

Dignity in retirement

Everyone deserves to live with dignity and financial security during retirement. But sadly, the gender pension gap undermines this, leaving many women unable to afford the lifestyle they had hoped for.

How to close the gender pension gap: practical steps

As a woman, I wholeheartedly support and recognise the need for systemic change. Still, such social overhaul doesn’t happen overnight and there are still steps we can take, personally, to help improve our financial futures.

Here’s a few ways you can start closing the gender pension gap in your own life:

Maximise your workplace pension contributions

Check if you’ve been auto-enrolled into your workplace pension. If you earn less than £10,000 per year, you can still opt in manually.
Consider increasing your pension contributions beyond the minimum 5% of your salary. Many employers will match higher contributions, so it’s worth checking your scheme’s details. Remember, the total yearly pension contribution gap among people paying into workplace pensions was 17% – with men putting aside £62.6 billion for their retirement, compared to £52 billion for women^{[1, p.16]}.
If your employer offers salary sacrifice options, this can help you save on tax while boosting your pension contributions. Just be aware that an announcement in the 2025 Autumn budget means that starting in in April 2029, employee contributions made through salary sacrifice will have a cap of £2,000 per year on the amount exempt from National Insurance contributions (NICs). You can find out more about this here.

Protect your National Insurance record

Check your NI record on the government website to ensure you have enough qualifying years for the full State Pension. You need 35 years for the full amount and at least 10 years for a partial pension.
If you’re a parent or carer, claim Child Benefits (even if you’re a high earner) to receive NI credits.
Consider making voluntary contributions to fill any gaps in your NI record, but only if it makes financial sense.

Share parental leave and childcare

Gender norms can sometimes dictate behaviour around career choices – especially when it comes to children – but remember there’s no reason why the woman should take on the brunt of the care if it’s not what makes sense for you and your circumstances. That’s why it could be worth considering the following:

Shared parental leave allows parents to split up to 50 weeks of leave and 39 weeks of pay. Sharing this leave can help women return to work sooner, reducing gaps in employment and pension contributions.
Flexible working arrangements and shared childcare duties can also help balance both partners’ careers and pensions.

Plan for your retirement needs

Use a pension calculator to estimate how much you’ll need in retirement – don’t forget to factor in healthcare costs and a longer lifespan (remember, women tend to live longer, after all). You could also check out our Wealthify pension calculator to get predictions on a Wealthify Self-Invested Personal Pension (SIPP) specifically (more on what that is in the next section).
Start planning early and review your pension savings regularly to ensure you’re on track.

Consider a personal pension or SIPP

A personal pension or SIPP is a great way to top up your retirement savings. One of the biggest advantages of a personal pension is the tax relief offered. For basic rate taxpayers, the government adds a 25% top-up to your contributions – so if you invest £800, it’s boosted to £1,000 in your pension pot. Higher and additional rate taxpayers can claim even more back through their tax returns.
Each year, you can contribute up to your full earnings or £60,000 (whichever is lower) into your pension while still qualifying for tax relief. This means you could save for your future while reducing your tax bill.⁶
Consistency in contributions over a long period of time could make a sizable difference in your final pension. For example, saving £150 per month into a Wealthify SIPP could grow to £115,700.21 after 25 years.
- Please note: This is only a forecast, with a projected value for a Confident Plan (Wealthify offers five investment styles: Cautious, Tentative, Confident, Ambitious, Adventurous) with an Original Plan and includes tax relief. This is not a reliable indicator of future performance. If markets perform worse, your return could be £76,011.65. If markets perform better, your return could be £188,061.54. Values correct as of 15/12/2025.
A Wealthify SIPP also offers flexibility as you can choose the amount to invest, and your own appetite for risk, with the added choice between our Original Plan and Ethical option.

Track all your pension pots

Did you know the average person has 9 jobs in their lifetime? This often means multiple pension pots scattered across different employers, making it easy to lose track of where your retirement savings are.
If you’ve lost track of old workplace pensions, don’t panic! The government’s pension tracing service can help you locate them for free. All you need is the name of your previous employer to get started.
Combining your pensions into one pot can simplify your finances and potentially save on fees. But before consolidating, check if your existing pensions offer valuable benefits (like lower fees or guaranteed rates) that could be lost by transferring.
Once a year, review your pensions to ensure they’re performing well, aligned with your goals, and charging reasonable fees. Small adjustments could make a big difference to your retirement plans.
Tracking your pensions, consolidating where appropriate, and reviewing regularly can help to increase your retirement savings. Start today—explore consolidation options to simplify your future: Learn about pension consolidation.

Final thoughts

Like most women, I hope to see society continue to strive for gender equality. But it’s not all doom and gloom, either, with global gender inequality narrowing overall as we speak.⁷

While it’s true that – for now – the gender pension gap still exists, it’s crucial we remember that it’s not unchangeable. Knowledge is power.

Even on a personal level, there are things we can do to take control of our financial futures – ultimately helping to close the gap for both ourselves, and future generations of women.

Remember: Start small.

Whether it’s increasing your pension contributions, checking your National Insurance record, or consolidating your pension pots, every action adds up. It’s never too late to make a difference!

Ready to take control of your retirement savings? Consider opening a Wealthify SIPP today and start building the future you deserve.

Please remember the value of your investments can go down as well as up, and you could get back less than invested. 

The tax treatment depends on your individual circumstances and may be subject to change in the future. 

Wealthify does not provide financial advice. Seek financial advice if you are unsure about investing.