Women lose out on £225k in pension savings – 10 tips to save now

Women who retire at the same time as their male partner or spouse could lose out on £225,000 in typical pension savings.

According to official data analysed by PensionBee, men tend to be the older partner in a relationship, typically by two to five years. 

So, if a woman leaves the workforce at the same time, it can have a detrimental impact on both her pension pot and a couple’s overall retirement savings. 

Savings gulf: Women who retire at the same time as their male partner or spouse could lose out on up to £225,000 in their pension pot, PensionBee analysis suggests

Romi Savova, chief executive of PensionBee, said: ‘While coordinating retirement is a common goal for many, the persistent gender pension gap in the UK presents a significant barrier to achieving this, which is only exacerbated for couples of different ages.’

According to PensionBee’s analysis of Office for National Statistics data and its own modeling system, which takes into account current pay gaps, men have typically accumulated nearly £440,000 in pension savings by the time they are 64. 

This is nearly £140,000 more than women of the same age, who on average have pots totalling just over £300,000, representing a gap of 32 per cent, says the firm 

However, if a couple with a two year age gap, namely a 62 year old woman and a 64 year old man, were to leave the workforce at the same time, the woman could end up with nearly £177,000 less in retirement.

This would leave her with a pot size of just over £260,000, according to the analysis.

Meanwhile, a couple with a five year age gap, a 59 year old female and 64 year old male, could potentially be around £225,000 worse off, ;eaving her with a pension pot size of just over £214,000 in retirement.

That represents a difference of 51 per cent compared to her older male partner, the figures suggest.

PensionBee’s pension pot size calculations stem from ONS data from the latest ‘Gender differences in commute time and pay’ report, and its own modelling system.

It said: ‘We used the median gross weekly earnings, and median hourly pay to work out median annual hours of paid work and annual pay by gender. We assumed annual pension contributions of 8 per cent, growth of 7 per cent, and fees of 0.5 per cent, for consumers saving from age 25 to 64 and taking no withdrawals between those ages.’

With this in mind, it is important to highlight that the figures will not apply to every individual’s circumstances. There are always many variables when it comes to pension pots.

Gender pension gap based on men and women retiring at different ages, according to PensionBee’s analysis of data
GapBoth retire at 64Women retire at 62, and men at 64 Women retire at 59, and men at 64 
%32%40% 51% 
£ £139,451£176,815£225,296 

Savova said: ‘This huge disparity in pension pot sizes for savers within a five year age range highlights the urgent need for policy interventions and bold action from employers so women can enjoy the same level of wealth in retirement as men.

‘It also proves once again that timing is everything with pensions, and ultimately the time at which an individual or couple choose to leave the workforce, and start withdrawing their pension, has a significant impact on their overall retirement income.’

Typical pension pot by age, according to PensionBee’s analysis of data
ColumnAge 64 Age 62Age 59 
Male£439,581£383,906 £311,984 
Female £300,130 £262,766 £214,285 

Why does the gender pension gap arise? 

There is no official measure of the gender pension gap, but it is typically understood to refer to the differences in retirement outcomes for men and women

This is a complicated area and there can be a myriad of reasons why a man’s pension pot can end up being significantly higher than that of a female spouse or partner who plans to retire at the same age.

One parent, and often the woman, may opt to take time out from working to bring up and look after children or care for an older relative.

In some cases, one parent may be forced to take time out of employment because childcare costs can, in some instances, be more than a work salary could bring in.

Alternatively, a woman may simply choose to work less than her male partner or spouse, and this in turn would often lead to her ending up with a lower pension pot when they retire.

Another reason a woman’s pension may be lower is because women tend to form a larger proportion of the total number of people working in lower earning jobs. 

The Low Pay Commission estimated that around 6.2 per cent of female employees aged 25 or over were paid at the applicable minimum wage rate in April 2021, against just under 4.5 per cent of male employees in the same age group.

Separately, in June last year, research from the Resolution Foundation claimed that 57 per cent of low-paid employees in 2020 were women. 

LEBC said in its ‘Gender Pension Gap: A Practical Guide’ report: ‘For many women, it’s the gaps they have in earning, while caring for other family members, and the impact of taking up part time, lower paid jobs to balance a career with family responsibilities which widens the gender pension gap. 

‘If gaps in working are also accompanied by gaps in retirement saving and membership of the state pension scheme, then the gender pension gap is not just a reflection of the gender pay gap, but the gap becomes a chasm which gets harder to fill as retirement approaches.’ 

PensionBee said: ‘Our research suggests that women face lots of barriers limiting their ability to build long-term savings, chief among them societal expectations around caregiving and pressure to take on unpaid labour. 

‘The difference in paid working hours first presents itself in a woman’s late 20s to early 30s, the time when mothers typically tend to have their first child. 

‘This difference peaks again in later life, as women aged 50 and over are twice as likely to provide unpaid care for others than their male counterparts. 

‘As a result, men’s pension pots grow by an average of £90,000 more than women’s between the ages of 50 to 64. This is particularly worrying as women tend to live longer and often bear their own care costs.’

Can you rely on a higher earning spouse’s bigger pension? 

Some partners married to a higher earner with a bigger pension pot may have considered relying on their partner’s work pension for their own retirement. 

However, this has become increasingly difficult to do due to the fact defined contribution, rather than defined benefit pensions, have become the norm. 

DC pensions are typically less generous and less reliable than their DB counterparts. In a DC pension, the amount you get when you take your pension pot depends on how much was paid in and how well the investments have done over time.

Meanwhile, in a DB, or ‘final salary’ pensions, how much you get depends on your pension scheme’s rules, and not on investments or how much you’ve paid in. 

Can you rely on your spouse’s National Insurance record for your state pension?

Anyone reaching state pension age from April 2016 onwards gets payments based on their own National Insurance record, and not that of a partner or spouse. 

Prior to this change, people could rely on their partner’s NI record to claim a state pension. There are limited exceptions to the new rules, which are explained here, such as inheriting second state pension from a late spouse in some circumstances.

People’s NI records could have taken a hit over the years, for instance because it was difficult to work for reasons such as holding low-paid jobs or voluntary roles. 

To check how your future state pension forecast is looking, the Government has an online tool available, which is free to use. Watch out for crooks online trying to get you to pay to use this service. 

What practical steps can be taken to close the gender pension gap?

If you are worried about your pension pot projections there are a number of practical steps that can be taken. These tips are mainly aimed at women, but can be equally helpful for men and other family members. 

There’s no one-size-fits-all approach when it comes to pension pots, but these ten tips, derived from findings by PensionBee and LEBC’s ‘Gender Pension Gap: A Practical Guide’, could help you on your way to securing a more comfortable retirement financially.

1. Contribute to a pension if you take a career break

It is possible to continue saving in a pension plan, even while you’re not working.

This can include keeping up contributions to a former workplace scheme, providing it’s a portable group personal pension, where each employee has their own individual plan, according to LEBC.

Before taking breaks, maximise your pension savings and mop up annual allowances from earlier years.

2.  Ask about pensions when starting a new job

When joining a new employer, always ask them about the pension scheme available. 

While a new salary may be your main focus, a good package of health, childcare and retirement savings can be worth thousands of pounds, LEBC says. 

Should you merge your pension pots? 

Managing only one might be easier… but you can lose valuable perks. Read more here.

3. Don’t abandon old employers’ pensions and consider consolidation

Many people build up a number of different workplace pension pots as they move jobs over time, but it is important not to ignore old pensions, even if you think they may only be worth a paltry sum. 

The value of pension pots can, if all goes well, build up significantly over time. 

It is always worth reviewing any old pensions you no longer pay into. Plus, it is possible to benefit by consolidating all pensions into one plan, but it may be prudent to get financial advice about this beforehand.

4. Stay enrolled in a pension during maternity leave

Becoming a mother is a common reason why women tend to fall behind in their retirement planning compared to men, LEBC says.

If possible, stay enrolled in a workplace pension scheme if you go on maternity leave. LEBC suggests this is important because quitting it costs more in lost employer contributions and tax relief than can be saved in the short-term.  

5. Claim free credits towards the state pension

You can claim free credits towards the state pension by signing up for child benefit, even if your family earns too much to get the payments. 

You can tick a box to do this, without having the hassle of filling in a tax return.

Parents, mostly women, can lose huge sums in state pension by not claiming child benefit because if you sign up late your credits are only backdated by three months.

Make sure the non-earning partner claims child benefit under their name, as the free credits are not needed by someone employed and building up a National Insurance record already. It is possible to swap credits between partners if you make this common mistake. 

Find out more about child benefit and the state pension here.

6.  Claim Marriage Allowance and the childcare subsidy

You should also consider claiming the Marriage Allowance and the childcare subsidy of up to 20 per cent of childcare costs, because this free money will help to make retirement saving affordable. 

Households where one spouse or civil partner has income of less than £12,500 and the other less than £50,000 can claim Marriage Allowance. This is worth £250 a year and if backdated for three years over £900, LEBC says. HMRC estimates that over 700,000 eligible couples have not claimed this yet. 

7. Shop around if you go for an annuity

If you buy an annuity at retirement, LEBC suggests you shop around because annual pensions can be up to 8.34 per cent more if you are healthy, 17.17 per cent more if you are a smoker, and up to 50 per cent more if you are in poor health.

8. Consider asking your partner or spouse to make contributions

As some women miss out on crucial earning years to take on caring responsibilities, it may be beneficial for their working partner to supplement their pension contributions so they remain on track for their retirement, according to PensionBee.

PensionBee says: ‘This is particularly important as statutory maternity pay is low, and making pension contributions on this budget can be challenging. 

‘It may be worth considering this over the long-term if one partner earns considerably more than the other.’

Things to consider: It may be beneficial for a higher earning working partner to supplement their lower earning partner's pension contributions

Things to consider: It may be beneficial for a higher earning working partner to supplement their lower earning partner’s pension contributions

If you are married it’s often best to build up both partners’ pensions in tandem and ensure they are both fully funded.

That way you enjoy the maximum benefit in retirement if you stay married, and are more likely to avoid a costly battle if you divorce.

If you do get divorced and both partners’ pensions are already a similar size, much of the difficulty – and hostility – involved in dividing them can be avoided. 

That said, this course of action will not be suitable for every couple, and it is worth considering getting financial advice before ploughing ahead with an idea like this. 

9. Defer receipt of the state pension

According to PensionBee, some people nearing retirement may wish to hold off claiming the state pension. ‘Delaying by even just by a few weeks can result in a higher weekly state pension amount, or even a lump sum payment’, it says.

As a general but not failsafe rule, women will tend to benefit more than men by deferring receipt of the state pension because, on average, they live longer.

But a decision to defer receiving the state pension will not be beneficial for everyone. Health, life expectancy, income and lifestyle factors should all be taken into account when weighing up the pros and cons of such a move. 

10. Leave your pension invested 

For a woman, according to PensionBee, it may be useful to keep your workplace pension invested for longer, especially if your male partner is already withdrawing from theirs. 

PensionBee says: ‘Leaving a pension invested for just a few years longer can dramatically increase a retirement income. 

‘While everyone can legally access their personal and workplace pensions from the age of 55 (57 from 2028), it doesn’t mean they always should, particularly if they have other means of income available.’

How to sort out your pension if you fear it’s falling short

If you are worried about your pension and whether you will have enough, read a full 10-step guide to sorting it out here. 

To get started, investigate your existing pensions. Broadly speaking, you need to ask schemes the following:

– The current fund value

– The current transfer value – because there might be a penalty to move

– Whether the pension is in a final salary or defined contribution scheme

– If there are any guarantees – for instance, a guaranteed annuity rate – and if you would lose them if you moved the fund

– The pension projection at retirement age.

You can use a pension calculator to see if you have enough – find This is Money’s here.

You should add the forecast figures to what you anticipate getting in state pension.

Get a state pension forecast here.

If you are tempted to merge your old pensions, check out some tips on how to decide here.  

If you have lost track of old pensions, the Government’s free tracing service is here. 

Take care if you do an online search for the Pension Tracing Service as many companies using similar names will pop up in the results.

These will also offer to look for your pension, but try to charge or flog you other services, and could be fraudulent. 

Tanya Jefferies



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