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Pension gap

Important information - the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not normally be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity's advisers or an authorised financial adviser of your choice.

" I worked for a national newspaper and the personal finance editor basically insisted we opt in to the company pension scheme. I was 24 and resented 'losing' £50 a month. But those relatively small sums I 'sacrificed' all those years ago have been my best investment."

Emma-Lou Montgomery, Associate Director, Personal Investing

Know what you're up against

Not surprisingly, lower wages throughout a woman’s lifetime are having a big affect on women’s pensions. And as private pensions depend on your earnings, it follows that you’ll be saving less. This isn’t helped by the state pension provision competing for being one of the lowest in Europe1.

Research shows that the UK’s gender pension gap – the percentage difference in pension income for female pensioners compared to male pensioners – was 37.9% in 2019-202

Proposed changes to childcare provision in the Spring Budget by chancellor Jeremy Hunt may well help to keep more women working. But even in later life, women are more likely to work part-time or retire early to look after elderly relatives - or because they’re suffering from restrictive menopausal symptoms.  

Divorce can also help women lose out later in life - with women neglecting to think about pensions when it comes to their settlement arrangements.


1. Pension Times - June 2023
2. Prospect: Achieving gender equality in pensions

Take control

The current state of affairs paints a pretty bleak picture. But forewarned is forearmed. Here are some things you can do now to help close the gap.

  • Pay your pension some attention now. Open a Self-Invested Personal Pension - if you don’t already have one - with as little as £20 per month (the government tops this up by £5).
  • Add 1% if you can to any contributions you’re making to a pension right now. It’ll make a big difference in the long run.
  • Take advantage of any additional company contributions on offer to your employee pension.
  • If you've collected a few pensions over the years, you might like to understand more about the pros and cons of bringing your pensions together.
  • And if you’re thinking of divorcing your partner, remember to factor in both your pensions when discussing your settlement package.

Important information - It’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances we strongly recommend that you seek advice from one of Fidelity’s advisers or an authorised financial adviser of your choice.

What you could do next

Start looking after future you, today

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