Despite progress in many areas of financial equality, the gender pension gap – the difference in pension income between female and male pensioners – continues to cast a long shadow over women’s retirement prospects.
Women continue to face deep-rooted barriers that make it harder to build long-term financial security. Lower lifetime earnings, career breaks, part-time or flexible working, and pension schemes that fail to accommodate non-traditional career paths all contribute to the issue. These challenges mean many are left with smaller pension pots and fewer options than their male counterparts when they reach retirement age.
It’s a gap that remains stubbornly wide, and the current slow pace of change underscores the urgent need for practical solutions.
My Pension Expert’s latest research highlights the difficulties that women continue to face when it comes to financial planning. Let’s take a look at what we found.
Understanding the situation
Our research revealed some concerning trends. 45% of women expect to be working into their seventies, while almost a third (32%) don’t believe their current pension savings will be enough to secure a comfortable retirement.
In comparison to women, only 38% of men think they will be working into their 70s, whilst 17% – half that of women – don’t think they will be able to retire in comfort based on their current level of savings.
The cost-of-living crisis has only made matters worse. Our research highlights that women are feeling the pinch more than men, with 65% saying it has made their attempts to save harder, compared to 55% of men.
The reality is that with financial pressures mounting and without urgent intervention, the gender disparities will only get bigger.
Knowledge is power
Systemic problems demand systemic solutions. Long-term policy changes, such as lowering the earnings threshold for auto-enrolment and improving childcare support, are vital, but they won’t happen overnight. More immediate action must be taken to ensure women are better equipped to plan for their financial future.
One of the most effective ways to address the gender pension gap is by improving women’s access to financial education and independent advice. Our research found that more than two-thirds (71%) of women wish they had learned about pensions earlier in their careers, while 35% want their employer to provide access to independent financial advisers. These are gaps that can, and should, be addressed with the right support from those in power.
As such, the responsibility lies with the government, employers, and the financial services sector as a whole to ensure that each and every person, regardless of gender, has access to affordable, independent financial advice.
The reason financial advice is so important is that it provides tailored guidance that takes each individuals’ personal circumstances into account. This helps women make informed decisions about growing their pension savings, when to access them, and how to maximise their retirement income.
Employer-backed financial wellbeing schemes, policy incentives that encourage pension engagement and easy to engage with advice services are just a few simple steps that can be taken.
Retirement security for all
A secure retirement shouldn’t be a privilege reserved for the few; it should be achievable for all. Yet, for too many women, financial security in later life remains uncertain.
Change is possible, but it requires a combined drive from policymakers, employers and those working in the financial services sector, taking meaningful action to provide all savers the right tools, including that increased access to financial advice.
A year from now, we should be having real discussions about the progress made to address gender disparities within financial planning rather than going over old ground once again. The time for action is now.
