Gender Pension Gap

Women are left with half the pension pot, no matter what their job

We have all heard about the gender pay gap, but very few discuss the gender pension gap, despite the fact so many women experience it. Women’s pensions at retirement are half the size of men’s, regardless of the sector they work in. The gender pension gap is the percentage difference in income between men’s and women’s pensions and it begins at the very start of a woman’s career.

The research found that every single industry in the UK has a gender pensions gap, even those dominated by female workers. Considering women are likely to live four years longer than men, this issue deepens as they need to have saved around 5% to 7% more at retirement age.

Worryingly, more than a third (38%) of women who have taken a career break were not aware of the long-term financial impact it would have on their pension.

Women seeking financial support

Carol Lammy-Steele, Financial Planner at Ellis Bates

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Three Key Industries

According to the research, the gender pensions gap exists regardless of average pay across different sectors, and ranges from a gap of 59% in the healthcare industry, to 13% in courier services.

The following sectors were found to have the largest gender pensions gaps:

  • Healthcare (59%)
  • Construction (51%)
  • Real estate/property development (48%)
  • Pharmaceutical (46%)
  • Aerospace, defence and government services (46%)
  • Senior care (45%)

Of these six sectors, three are key industries for female employment – healthcare, pharmaceuticals and senior care.

Lower Pension Contributions

There are many reasons for the gender pensions gap, ranging from women holding fewer senior positions and being paid less, resulting in lower pensions contributions, to the fact they are more likely to take career breaks due to caring responsibilities.

Of those that have taken a career break, 38% did not know the financial impact it had on their pension contributions.

Gender Financial Confidence Gap

Another potential driver is a significant gender confidence gap when it comes to managing pension pots: only a quarter (28%) of women said they had confidence in their ability to make decisions about their pension, compared to almost half (48%) of men.

This lack of confidence extends further to other financial decisions, with women less likely than men to feel confident managing their investments (22% of women versus 41% of men), and their savings (56% of women versus 67% of men).

While many factors are out of your control, here are the actions you can take:

  • Contribute as much as you can to your pension – and start early. Compound interest remains hugely underrated and poorly understood by both some men and women.
  • Check the charges on your historic pension pots. If appropriate, see if consolidating your pots will bring them down.
  • Check how much your State Pension will be and when you’ll get it. If it’s not going to support your ideal lifestyle, plan how you’ll cover any shortfall.
  • Put a bit more into your pension whenever you get a pay rise.
  • Talk through your pension planning with your partner. Make sure you know about each other’s saving plans, contribution limits and that you are both on the same page.
  • Keep a regular eye on your pension to make sure you’re in full control of it and saving for your ideal future

There are many reasons for the gender pension gap, ranging from women holding fewer senior positions and being paid less resulting in lower contributions and also due to the fact they are more likely to take career breaks due to caring responsibilities.

Need financial advice to close the gender pay gap in your pension?

Women often have disrupted work patterns, career gaps and work part-time – this can impact their ability to save consistently for retirement without savings gaps.

If you are concerned about your retirement plans and would like to review your pension options, please do contact us. We look forward to helping you.

Try our pension calculator

It is estimated very few of us realise just how much we need to be saving into our pensions and the level of income our pensions will provide. Use our pension calculator to help you understand the level of contributions you need to be making in line with your retirement aspirations.

Pension Reviews

“I was very confused about my pensions when I retired recently, and I contacted Ellis Bates who were recommended by the Pension advisory Service, they have been very helpful in the amalgamation of my Pensions into a more simplified drawdown pension. Carol Lammy-Steele has been very professional and helpful during the process and always there any time of the day to give advice, would recommend her to anyone who needs help with financial questions.”

“I had never used a financial advisor but he was helpful, knowledgeable, and seemed very good at what he did. He helped me understand my pension which I hadn’t done in all the years that I have had it. Very good indeed.”

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