Gulf remains between male and female pension savings

  • Shunil Roy-Chaudhuri
  • 17 July 2023
  • 5 mins reading time

The gender pensions gap, which reflects the difference in private pensions savings between men and women, has narrowed to 35 percent, according to a report from the Department for Work and Pensions (DWP) released in June (1).

The current gender pensions gaps is based on data collected between 2018 and 2020. It shows an improvement on the gap of 40 percent, based on 2016 to 2018 data, and on the peak gap of 42 percent, based on 2006 to 2008 data. But it also shows that women in general, despite being expected to live for nearly four years longer than men (2), still have significantly smaller pension savings of their own to fund them in retirement.

Gap widens for women in their late 40s

The report, which doesn’t take into account the impact of the state pension, shows that the gender pensions gap is relatively narrow, at 10 percent, for people aged 35 to 39. But it then widens dramatically, to 47 percent, for those aged 45 to 49.

Katie Nutting, Financial Planning Director at Schroders Personal Wealth (SPW), said: ‘I often see women with smaller pension savings than their male partners, as many of them take time to have children or look after elderly relations. Women will often work fewer hours than their partners if they have caring responsibilities, which results in less money being saved.’

Impact of pensions auto-enrolment

Curiously, the gender pensions gap was narrower, at less than 30 percent, during periods from 2010 to 2016. But this was around the time of the introduction of auto-enrolment in workplace pensions in 2012.

In effect, auto-enrolment led to the inclusion of a relatively large number of women with low pensions savings, who, when they had no pension savings, were excluded from the report. The report states: ‘This means the [gender pensions gap] can increase even while female savers are increasing their private pension wealth.’

Katie added that women, who are lower earners overall, are missing out on a lot of the pensions tax relief earned by their male counterparts, who may well be on a higher tax rate.

Even so, Katie points out that each partner in a marriage or civil partnership has their own tax allowances, such as annual ISA allowances. She says that it can make sense, in terms of tax-planning, to try to build up tax-efficient investments in both partners’ names, to make the most use of these allowances. But this is a complex area and you may benefit from speaking with a financial adviser.

The gender pensions gap between male and female employees eligible for auto-enrolment pensions is narrower, at 32 percent, than for the wider population. Auto-enrolment began to be introduced in 2012 and means that employees who meet certain requirements are automatically enrolled in employment pension schemes and then have to choose if they want to opt out.

Katie points out that additional factors can also contribute to overall gender inequality in finances. ‘In my experience, many women are uncomfortable making financial decisions that involve investment risk,’ she said. ‘They women often hold cash, the value of which can be eroded by inflation, and they often avoid investments with growth potential.’

Katie adds that women in a marriage or civil partnership can try to be active in family finances. ‘It is important for women to be involved in any financial advice received by their male partners, even if they have no savings to invest. They should take an active interest in long-term family financial plans, so they are in an informed position, just in case they face divorce or bereavement.’

At SPW, one of our principles is to involve family and loved ones in regular reviews with a financial adviser. This can help ensure both men and women (regardless of who is the main earner) and families as a whole are knowledgeable about their current financial situation and the goals they are aiming for.


(1) Department for Work and Pensions, ‘The Gender Pensions Gap in Private Pensions’, 5 June 2023.

(2) Office for National Statistics, ‘National life tables – life expectancy in the UK: 2018 to 2020’, 23 September 2021.

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