How to fix the UK’s 37% pension gap

The UK’s gender pension gap is one of the largest in the developed world. On average, British women retire with pensions around 37% lower than men’s, according to OECD data.¹ That gives us the second-largest gender pension gap among the 38 developed economies the organisation looks at.

This isn’t just a statistic. It translates into:

• Less financial independence in later life
• Greater reliance on partners or the state
• Higher risk of poverty in retirement
• More difficult choices about when (or whether) to stop working

So why does the gap exist and what can women do about it?

Why does the gap exist?

While the gender pay gap (the difference in earnings between women and men) plays a role, one of the biggest drivers is what’s often called the “motherhood penalty”.

Women are more likely to take career breaks, reduce their working hours or move into lower-paid, more flexible roles - often because of childcare responsibilities. This can mean they fall below auto-enrolment thresholds or have to pause pension contributions during caregiving years.

Because pensions rely on long-term compounding, even relatively short breaks can have a significant long-term impact.

The result? Smaller pension pots and less investment growth over time.

As I argued recently in this article for The Times, structural reform, such as affordable childcare and shared parental leave, is part of the long-term solution. But there are also steps women can take right now to protect their retirement income.

Practical steps to protect your pension

1. Safeguard your State Pension entitlement

Time spent out of the workforce doesn’t have to mean gaps in your State Pension record. If you’re caring for children, make sure you’re registered for Child Benefit ­­- even if you choose not to receive the payments.

Doing so ensures you receive National Insurance credits, which count towards your State Pension.

• Watch: State Pension in 2026/27 - and what will it be worth in the future?

Missing qualifying years can reduce what you receive later, so a quick administrative check today could protect decades of future income.

2. Don’t assume you’re “too low paid” to save into a workplace pension

If your earnings fall below the £10,000 auto-enrolment threshold with one employer, you won’t automatically be placed into their pension scheme. But that doesn’t mean you’re excluded.

You have the right to opt in - and, if you earn over £6,240 a year, your employer will have to contribute too.

That employer contribution, combined with tax relief and long-term investment growth, can significantly increase your retirement savings over time.

3. Maintain continuity where you can

Career breaks and reduced hours are sometimes unavoidable. But where it’s realistic, maintaining some connection to paid work, even on flexible hours, can help to keep up both your earnings progression and pension momentum.

Retirement savings benefit hugely from consistency. Even relatively small, ongoing contributions can compound into meaningful sums over the long term.

4. Think of pension saving as a shared financial strategy

When one partner scales back work for childcare or caregiving, the financial impact shouldn’t fall on them alone.

It can be worth reviewing pension contributions together as part of a wider household plan. The working partner may be able to contribute to the other’s pension, within annual limits, helping to balance long-term outcomes.

Retirement planning works best when it reflects shared life decisions.

5. Get clarity on what you already have

It’s common to build up multiple pension pots over the course of a career - especially for women who’ve worked part-time and moved between roles.

Taking stock of your pensions can help you:

• See your total savings in one place
• Understand what you’re invested in
• Check fees and performance
• Consider consolidation where appropriate

All of this can help you make better decisions.

• Learn more about our award-winning Self-Invested Personal Pension
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6. Review and adjust regularly

Retirement planning isn’t something you can just set and forget, particularly if your working pattern changes.

When your circumstances shift, it’s worth revisiting your pension contributions. Even small increases - for example, redirecting part of a pay rise or bonus, or boosting your payments when your mortgage rate comes down - can make a big difference over time.

The earlier you start, the more powerful compounding becomes. But progress is still possible at any stage. Small changes can make an outsized difference to the kind of lifestyle you’re able to enjoy in retirement.

Please remember that none of this is financial advice. For personalised financial advice, you should speak to a qualified financial adviser.

Got a burning question you want to ask? Why not drop us a line. Click here to ask your question.

• Read: Invest as a lump-sum or in stages? What the numbers say
• Read: How to create a retirement plan in 15 steps
• Read: Your 10-minute tax-saving toolkit

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