You’ve heard of the pay gap, but have you heard of the pension gap?


The gender pay gap is finally getting the column inches it deserves. By 30 March all public bodies in the UK have to report details of their gender pay gaps to the Government Equalities Office, and all companies with over 250 employees must do the same by 4 April.

What we’re seeing from the data so far isn’t surprising – women are systematically paid less than their male counterparts, regardless of sector or level of seniority.

April 2017 figures from the Office for National Statistics (ONS) show that the gender pay gap (for median earnings) for full-time employees is at 9.1%, down from 9.4% in 2016. Said to be at its lowest since the 17.4% pay gap recorded when the survey began in 1997, time will tell if things really have changed for the better as more results are made public.

Alongside this, another less visible discrepancy exists; just as there’s inequality in pay, there’s inequality in pensions. When women are paid less in their working lives, they’re paid less in retirement too.

What is the pension gap and how does it affect you?

Numerous studies have found that women save less into their pensions than men, resulting in much lower retirement savings. At the end of 2016 PensionBee conducted its own research. We took a sample of our customer’s pensions and split them by gender and age group, in the hopes of discovering where women begin falling behind – and why.

We found that while pensions are relatively equal between the genders in their early thirties, a gap begins to emerge from age 36 onwards, with men aged 36-40 having an average of 14% more in their pensions. Women’s savings go on to take a drastic hit in their forties, with the average gap widening to 22% for women over 45.

Our findings support IFS research that points to a gender pay gap, with the disparity between women’s and men’s earnings rising to over 30% 10 years after a woman has her first child. ONS data puts the average age at which a woman has her first child at 28.5, and as women are still much more likely to stay at home with the children than men, this could explain why we’re seeing detrimental effects on our female customer’s savings from their mid-late thirties.

The harsh reality is that when women take time out of employment to raise children (or care for elderly relatives), their pensions suffer. And when women return to work, the pension contributions they can afford to make on part-time or reduced salaries can’t fill the void.

Three ways to overcome the pension gap

Unlike the pay gap, which falls squarely on the shoulders of employers to resolve, there are a few things you can do to help narrow the pension gap and avoid losing out in the long-term.

  • Understand your pension savings

Without a clear overview of your savings it’s impossible to know just how bad, or good, the situation is. If you’ve had several jobs it’s likely you’ll have started a few different workplace pensions so it’s important to keep track and check your statements regularly.

One of the easiest ways to manage your pensions is to combine them all into one simple plan. At PensionBee we can consolidate your pensions for you and help you find any old pensions you’ve lost track of. With just one pension to manage you’ll be able to easily monitor the performance of your pot and have a stronger grasp on your finances.

  • Set yourself a retirement goal

To ensure you have the same quality of life in retirement it’s recommended you save around 15% of your salary each year, however the true amount you’ll need to save depends on how old you are when you start meaningfully saving. The younger you begin contributing to your pension the better, and the later in life you start the more you’ll need to save.

Our pension calculator can help you find out how much you should be saving each month. If you want to retire at 60, for example, with a retirement income of £25,000 a year, simply enter these details into the calculator, along with your current age and the total of any savings. It’ll tell you how much you’ll need to save between now and 60 to reach your £25,000 target, broken down by month and year.

  • Increase your pension contributions

When you have a goal to work towards saving becomes a lot easier. Increase your pension contributions to whatever you can comfortably afford and see if it’s possible to increase your employer’s contributions too.

From 6 April 2018 it will be a legal requirement for your employer to make a minimum contribution of 2% of your annual salary through Auto Enrolment. Depending on the nature of your workplace scheme, it may be possible for your employer to match your contributions to a set amount. If contribution matching is on offer, increasing the amount you save into your pension will help unlock higher contributions from your employer.

Learn more about how you can better manage your pension at

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

By Women's Business Club

Women's Business Club empowers women to succeed in business through awards, conferences, business support membership, and news. Find out more at or send your press release [email protected]. Articles and adverts are chargeable, see media pack at