Stella Beale by Stella Beale |

The gender pensions income gap is more than double the gender pay gap: 40.3 per cent compared to 17.3 per cent1.

The problem is many women don’t know about this until it hits them in retirement. No-one tells them2.

Women tend to get a raw deal

We know through the work that we did in our report, The Gender Pensions Gap: Tackling The Motherhood Penalty, that there are four areas of real concern.

Firstly, many women take career breaks to have children. My colleague Jenna Gadhavi wrote recently about her own experiences of working part time, and the impact this has had on her ability to save. Childcare can be expensive3, and many mums can’t afford to go back to work.

Secondly, it is well known that, on average, women get paid less than men. That gender pay gap means lower pension contributions – and less income in retirement.

Third, too few women4 qualify to be in auto-enrolled company pensions, thanks to inflexible rules.  They may have a number of jobs that flexibly fit around their caring duties but if each pays less than £10,000, they will miss out of being automatically placed into their employers’ qualifying pension schemes.

Lastly, one of the benefits of a workplace pension pot is tax relief. But up to 1.75m5 people, most of them women, won’t get this because of the way their employer claims tax on net pay. This is a glitch in the pension rules and as such we’ve been calling on the government to fix this anomaly for many years.

All of this is made worse for women because savers in general tend to be unaware of how much they will need to last through retirement. Our research report, New Choices, Big Decisions – 5 Years On, found that people leave retirement planning until late – often too late.

Fixing the problems

We’ve recommended that the pension industry (and that includes us) do more to engage with women in their mid-40s and beyond who work part time. If we can all help women understand the long-term effect reduced pension contributions have on their available income in retirement, they will then have the knowledge to make their own informed decisions.

But better engagement is only part of it. The government must step up by supporting women who might want to return to jobs or work more hours once they have children. They can do this through bigger grants for local authorities to provide greater funding for good quality pre-school childcare. They can also abolish the net pay anomaly, to help those 1.75m low earners receive the much-needed tax relief to bolster their pensions savings.

And then there are other technical things to fix, like bringing more lower-paid workers into workplace pensions – three-quarters of them women – by cutting the yearly auto-enrolment earnings trigger to £6,240. Our 2019 report into the issue also recommends that consideration should be given to extending state pension carer credits to auto-enrolment. There’s much to do.

The gender pensions income gap can only be bridged if both policy makers and the industry take decisive action and with speed.

To find out more read our report, New Choices, Big Decisions – 5 Years On.

1 Based on 2018/19 figure:,gap%20that%20year%20(17.3%25).






This article was written when we were B&CE, before we changed our name to People’s Partnership in November 2022.