The gender pay gap has narrowed considerably over the past two decades, but when it comes to retirement savings, the difference between men and women remains significant.
According to the Office for National Statistics (ONS), the gender pay gap for full-time employees stood at 6.9% in April 2025, compared with 13% in 2005.
However, research from the Pension Policy Institute (PPI) reveals a much wider disparity in pension wealth, particularly among those approaching retirement.
At age 57, the gender pension gap stands at 46%, meaning men have, on average, around 85% more in pension savings than women of the same age.
The difference is largely driven by employment patterns and earnings throughout working life.
Women are less likely to be in employment than men, with employment rates of 75% compared with 82%. Among those who are employed, 33% of women work part-time, compared with just 10% of men.
Caring responsibilities often play a significant part in these differences, with career breaks and reduced working hours affecting both earnings and pension contributions.
Interestingly, ONS figures show that women working part-time earn 2.9% more per hour than their male counterparts. However, fewer hours generally mean lower overall earnings and, consequently, smaller pension contributions.
The gender pay gap also contributes to the problem. As workplace pension contributions are typically calculated as a percentage of earnings, lower salaries mean smaller amounts being invested for retirement.
Over a working lifetime, these differences can accumulate considerably.
Automatic enrolment has helped millions of people save towards retirement, but the current rules can disadvantage lower earners.
Workers generally need to earn more than £10,000 a year from an individual employer to qualify for automatic enrolment. Even where employees are enrolled, minimum contributions are usually calculated only on earnings above £6,240.
At the standard combined minimum contribution rate of 8%, this means approximately £500 a year in potential pension contributions is excluded from the calculation.
For those working part-time or holding multiple lower-paid jobs, the effect can be particularly significant.
The gender pension gap is not simply a reflection of different salaries. It is the cumulative result of working patterns, caring responsibilities and pension contributions over many years.
For women approaching retirement, understanding the value of existing pension savings and the income they are likely to provide is particularly important.
Where affordable, increasing pension contributions can help address a potential shortfall. It may also be worth reviewing pension arrangements following career breaks, changes in working hours or periods of self-employment.
For couples, retirement planning should consider both partners' pension provision rather than relying solely on combined household savings.
The earlier any potential shortfall is identified, the more time there is to consider the available options.
If you are concerned about your pension provision or would like to review the tax implications of your retirement planning, please get in touch with our team at Forrester Boyd.
Further information about the gender pay gap is available from the Office for National Statistics.
Research into the gender pension gap is available from the Pensions Policy Institute.
All data and figures referred to in our news section are correct at the date of publishing and should not be relied upon as still current.
