How the gender pay gap adds to the pension gap
The gender pay gap currently stands at 12.8%, the equivalent of £2,548 a year for the average woman worker, according to analysis by the TUC union, hurting how much women can typically save for retirement. We look at five ways women can boost their pension.
Laura Miller
The average woman effectively works for 47 days of the year for free due to the gender pay gap, according to new analysis, adding to women’s pension gap problem.
The gender pay gap currently stands at 12.8%, meaning the average woman worker gets the equivalent of £2,548 a year less than the average man worker, the research from the TUC union showed. The gender pay gap is widest for middle-aged and older women, in their peak pension saving years.
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Paul Nowak, TUC General Secretary, said: “Women have effectively been working for free for the first month and a half of the year compared to men.
“With the cost of living still biting hard, women simply can’t afford to keep losing out. They deserve their fair share.
“The Employment Rights Act is an important step forward for pay parity for women. It will ban exploitative zero hours contracts, which disproportionately hit women and their pay packets.
“And it will make employers publish action plans for tackling their gender gaps – but these plans must be tough, ambitious and built to deliver real change – otherwise they won’t work.”
Pay gap across industries
The pay gap persists across different industries, and even in jobs dominated by female workers, such as education and care.
In healthcare and social work, the earning gap is 12.8%, meaning the average woman effectively works for free for 47 days.
In education the earning gap is 17%, making women’s ‘work for free’ period 62 days. In wholesale and retail the earning gap is 10.5%, with 38 ‘free work’ days.
The longest wait for Women’s Pay Day comes in finance and insurance. The gender pay gap (27.2%) is the equivalent of 99 days, meaning women work for free until 9 April 2026.
Gender pay gap by age
The gender pay gap affects women throughout their careers, from their first step on the ladder until they take retirement, the TUC analysis found. But the gender pay gap is widest for middle-aged and older women.
Women aged between 50 and 59 have the highest pay gap of 19.7% and work the equivalent of 72 days for free, until 13 March 2026. Women aged 60 and over have a gender pay gap of 17.7%. They work 65 days of the year for free and they start earning from 7 March 2025.
By comparison women aged 40 to 49 have a gender pay gap of 16.2%, so work 59 days for free until 28 February 2026.
The gender pay gap widens as women get older due to women being more likely than men to take on unpaid caring responsibilities throughout their lives, limited childcare and social care provision, and too few good quality flexible jobs, the TUC said.
Gender pension gap
The gender pension gap is a whopping 48% among those approaching retirement, according to the Department for Work and Pensions (DWP).
The latest figures, published in July 2025, have been released alongside which said people retiring in 2050 are on track to be poorer than pensioners today.
Women could be at particular risk. The average woman aged 55-59 has built up a private pension worth £81,000 compared to £156,000 for the average man.
Applying an annuity rate of around 7% at age 60 would convert these pension pots into an annual income of around £6,000 for women and £11,000 for men. It means women are left with £5,000 less each year.
These figures don’t include those who haven’t built up any private pension wealth at all. The gap rises to 62% when they are factored in.
“The government’s latest research paints a bleak picture for women approaching retirement,” said Rachel Vahey, head of public policy at AJ Bell.
“Although automatic enrolment has done its bit in creating more female pension savers, boosting the number of women who pay into a pension, the analysis clearly shows that the wheels come off women’s retirement savings when they start a family.
“The gap is much smaller at younger ages, at 22% for those aged between 25 and 29, but rises dramatically for older women.”
What’s behind the gender pension gap?
Several forces have conspired to create a stubborn gender pension gap.
One key factor is that women are more likely to work part time or become carers. If they are working fewer hours, that means less money going into the pot.
Part-time work generally means a smaller salary. This means you could miss out on being enrolled into your workplace scheme altogether, as companies only have to sign you up automatically once your salary hits £10,000. The onus is on you to request to join.
Time out of the workplace also creates gaps in many women’s contributions. This often comes at both ends of their career, with women disproportionately taking up the mantle to care for both young children and elderly parents.
A lack of flexibility and understanding can also force some women out of the workplace in their 40s and 50s as they deal with the medical implications of the menopause – often at a point in time when they are reaching the top of the corporate ladder.
Women already earn less as a result of the gender pay gap, meaning the problem is twofold. The pension gap then snowballs over time thanks to the way investments compound.
Age group | Men | Women | Gender pension gap (£) | Gender pension gap (%) |
16-24 | £7,000 | £5,000 | £2,000 | 26% |
25-29 | £15,000 | £12,000 | £3,000 | 22% |
30-34 | £36,000 | £16,000 | £20,000 | 56% |
35-39 | £36,000 | £24,000 | £12,000 | 32% |
40-44 | £58,000 | £44,000 | £14,000 | 24% |
45-49 | £100,000 | £48,000 | £52,000 | 52% |
50-54 | £102,000 | £63,000 | £39,000 | 38% |
55-59 | £156,000 | £81,000 | £75,000 | 48% |
60-64 | £99,000 | £63,000 | £36,000 | 36% |
65-69 | £89,000 | £60,000 | £29,000 | 33% |
70-74 | £100,000 | £50,000 | £50,000 | 50% |
75+ | £96,000 | £25,000 | £71,000 | 74% |
Source: DWP estimates based on the wealth and assets survey from the Office for National Statistics (ONS). Percentages may not correlate directly with pension pot amounts due to rounding.
The gender pension gap is widening
In 2023, the government calculated a smaller gap of 35% among those aged 55-59. By 2025 this had risen to 48%.
“The widening appears to be related to the move from defined benefit to defined contribution pension provision, which appears to be disproportionately affecting women's retirement outcomes more than men’s,” said Kate Smith, head of pensions at Aegon.
Defined benefit (DB) schemes were more common in the past, but are still widely used in the public sector. They are typically more generous than defined contribution (DC) schemes.
DB schemes pay out a guaranteed income in retirement, usually based on your salary and length of service. Meanwhile, the size of a DC pot depends on how much you contributed while working and how your investments have performed.
The gender pension gap rises to 75% among those who only have DC pots. It falls to 39% among those who only have DB pots.
“Considering that DC pensions are the future for most, it's deeply concerning that the biggest gender pension gap is for women aged 55-59 who only have DC savings wealth,” Smith said.
“Unless there are radical interventions to close the gender pay gap, address labour market inequalities and societal norms, this doesn't bode well for the future of women's pension equality.”
Five ways women can boost their pension
While the onus is on policymakers and employers to create a fairer environment for women saving for retirement, there are also some steps you can take to boost your own financial resilience.
1. Start building your pension at a young age
Building wealth is less about timing the market than time in the market. Start building your pension as early as possible, even if retirement feels a long way off.
Under auto-enrolment rules, UK employers are legally obliged to provide an employee pension scheme and, as soon as you start working, you will be automatically enrolled (provided you are 22 or older, and earn at least £10,000).
You will automatically start contributing 5% of your salary, and your employer is obliged to contribute a minimum of 3%. You are free to opt out or to reduce your 5% contribution, but it is almost always a bad idea.
Opting out when you are young means you will have less in your pot when you reach retirement. It is not just your contribution that you lose, but also the opportunity for valuable investment returns. These can snowball over time due to compounding.
Opting out could also mean you lose your employer contribution, which is essentially ‘free’ money.
2. Increase your pension contributions
As well as maintaining your 5% pension contribution, you should consider upping your contributions, if you can.
Investing consistently over a long time horizon is the best way to build wealth. While it might be tempting to stash the cash in your bank account where you can easily access it, investment returns almost always beat cash over the long run, even when interest rates are high.
Even a small increase could have a significant long-term impact, as illustrated by figures we plugged into Scottish Widows’ pension calculator.
The calculator shows that a 25-year-old earning £30,000 could boost their pension by almost £40,000 by the time they turn 60, if they increase their annual pension contributions by 2% above the standard auto-enrolment level.
These calculations assume medium investment growth of 5% per annum, annual investment fees of 0.75%, and annual wage growth of 3.5%.
Scottish Widows recommends boosting your contributions by even more than this, if you can. The pension expert says 12-15% (rather than the standard 8%) could help you achieve a comfortable retirement. This includes your personal contributions, your employer’s contributions and tax relief.
3. Find out if your employer will match your pension contributions
If you pay more into your pension, some employers will match your contribution, up to a certain limit. Take hold of this opportunity if you have the chance. It is essentially free money and can help you narrow the pension gap.
4. Pay into your pension while on maternity leave, if you can
When you go on maternity leave, your employer will usually continue to make contributions to your pension based on your salary before you went on leave. This continues for at least 39 weeks, if you are entitled to statutory maternity pay.
Your personal contributions will be based on your maternity pay, though, which is likely to be less than your full salary. If you are in a position to top these up so they match what you were paying in before, it could be worth considering.
5. Can your partner top up your pension contributions?
If you take time out of work to carry out caregiving responsibilities, such as looking after young children, speak to your partner to find out whether they can contribute to your pension during this time.
It could be worth having this conversation before deciding to have children to ensure you are on the same page when it comes to your finances.
Research from Moneyfarm revealed that 42% of men would not be prepared to pay into their partner’s pension while on maternity leave, with 27% saying the woman’s pension is her own responsibility.
“These figures highlight a significant gap in financial support and shared responsibility within households,” said Carina Chambers, pensions technical expert at Moneyfarm.
“Encouraging open conversations about financial planning and the importance of supporting each other's long-term financial goals is a step towards achieving true gender equality. By working together, we can ensure that all women have the financial security they deserve, both during maternity leave and beyond.”
It is also worth remembering that a pension is a tax-efficient way to save and invest for retirement. As such, topping up a spouse’s pension is a good way to shield your collective wealth from the taxman.
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