08 Mar 2026

Mind the gender pensions gap: why women face a poorer retirement

The UK has the second largest gender pension gap in the OECD.

Holly covers personal finance topics from credit cards to wills. She enjoys turning complex money matters into clear, practical advice.

Men approaching retirement have pensions that are three times bigger than women, according to new research from the Department of Work and Pensions (DWP).

The figures reveal the extent to which systemic and structural inequalities - such as the gender pay gap and the unequal division of care and unpaid labour - affect women’s retirement savings.

Here, we explore the factors that leave women worse off in retirement and explain what you can do to maximise your pension pot.

Mind the gender pensions gap

The National Child Development Study follows the lives of 17,415 people born in 1958.

The most recent survey, which was carried out on behalf of the Department for Work, revealed stark gender inequalities when it comes to how much men and women have saved for retirement.

On average, men aged 62-65 had defined contribution pensions that were three times bigger than women's: men typically had £90,000 saved, while women had £28,500. Men’s annual defined benefit pensions were worth nearly twice as much (£13,900 vs £7,500).

The study also found that women were more likely than men to have no or low-value pensions and mainly rely on the state pension for their retirement income.

From April, the full new state pension will be worth £12,548 a year, but the amount needed by a person living alone for a 'minimum' standard of retirement is £13,400, according to research by Pensions UK.

Find out more: how much will I need to retire?

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How the gender pay gap affects pensions

One of the main drivers of the gender pensions gap is the gender pay gap. Pension contributions are typically based on earnings, meaning women feel the effects of pay inequality both in their payslips and their pension pots.

Across all types of employment, women earn on average 12.8% less per hour than men, according to the most recent figures from the Office for National Statistics (ONS).

And having children has been shown to significantly reduce women’s earnings - an effect known as the ‘motherhood penalty’: women who have children lose on average £65,618 in earnings by the time their first child turns five, according to ONS figures.

Find out more: how to boost your pension

Addressing pension inequality in your household

While the causes of the gender pension gap are systemic and structural, there are steps you can take to address pension inequality in your household.

Have an open conversation about how earnings, pensions and caring responsibilities are divided. For example, if you take time out of work or reduce your hours to care for children, your partner could contribute to your pension while they’re still working.

And it’s crucial that you consider how pensions will be shared if you separate or get divorced: according to pensions provider Royal London, only 11% of divorces end in pensions sharing, where both people own part of the pension.

Unequal caring responsibilities

The unequal division of caring responsibilities and lack of affordable childcare affect the amount women can save for retirement.

Women are more likely than men to reduce their working hours or stop working due to the cost of childcare, according to a pensions briefing by the feminist economics think tank Women’s Budget Group.

This directly affects women's ability to build a private pension: analysis by pensions provider Royal London shows that spending 12 years working part time to care for children could reduce pension savings by over £90,000, or £180,000 for those that stop working.

Find out more: help with childcare costs

Protect State Pension entitlement

Claiming child benefit can protect your entitlement to the state pension if you take time out of work to care for a child.

You'll need to have made at least 10 years of National Insurance contributions (NICs) to be eligible for the state pension, and at least 35 years to receive the full amount. If you aren’t working and receive child benefit, you’ll automatically qualify for NICs.

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Inequality within the pensions system

While unequal pay and division of unpaid labour affect the amount women can earn and save for retirement, Women’s Budget Group highlights how further inequality is built into the pensions system itself.

For example, when you save into a pension the government tops up your savings in the form of tax relief. This means that basic-rate taxpayers need to contribute £80 to save £100 into their pension pot, while higher-rate and additional-rate taxpayers only need to save £60 and £55 respectively to save the same amount.

And while auto-enrolment has significantly increased the number of people who pay into a workplace pension, women are less likely to meet the threshold for being signed up: figures from the DWP show that women account for 69% of those earning below £10,000 - the threshold above which your employer must legally enrol you in a pension scheme.

Find out more: pension tax relief explained

Check pension contributions during parental leave

If you’re auto-enrolled into a workplace pension scheme, your employer should continue to pay pension contributions if you take parental leave.

Check your payslips to ensure you receive the correct amount: while you're receiving paid parental leave, your employer's contribution should be based on your earnings before you took leave.

'It's not about confidence'

The financial services industry needs to recognise the systemic, situational and social factors stopping women from saving and planning for later life, rather than focusing on a perceived lack of female confidence in financial planning, according to a new report published by the Edinburgh Futures Institute.

Jenny Ross, Which? Money editor, said: 'Inadequate pension savings can have devastating consequences for quality of life in retirement, so it’s essential that more is done to address the systemic issues that prevent many women from building a pension pot to match their male peers.

'It’s time that we move away from the outdated assumption that women lack the confidence to handle financial planning, and instead look at tackling the practical and financial realities – from time away from work to take on caring responsibilities to the gender pay gap – that may prevent them from doing so.'