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How financial advice could help you to bridge the gender retirement gap

Recent figures suggest that the average woman would need to work an extra 18 years to retire with the same pension pot as her male equivalent. Financial advice can help to bridge that gap in several ways.


The main factors affecting women’s pension savings are lower average wages, a higher percentage of female part-time workers, and time out of work when starting a family.

The savings gap is exacerbated by other issues too.

Higher life expectancy among women, and an increased likelihood of needing later-life care, mean that women need to fund for the time that they may be left on their own. This makes bridging the retirement gap even more crucial.

On average, women will retire with £136,800 less than men

MoneyAge reports that on average, women will retire with around £69,000 in their pension pot. This is compared to around £205,800 on average for men.

While average pension funds have almost doubled since 2019 – from £57,000 to £111,800 – women’s pensions have increased by just over a quarter (26%). And this is despite more than 10 million women being in full-time work.

Several factors are causing this gender retirement gap.

Gender inequalities in pay

Women earn £10,800 less annually, on average across all employment types. The full-time median wage for a woman is £6,100 less than their male equivalent’s.

There is a discrepancy in the type of work undertaken too, with women making up 75% of part-time employees.

Auto-enrolment ineligibility

With wages lower, and more women in part-time work, eligibility for auto-enrolment is also affected.

One in six working women are ineligible under current rules. This means they are missing out on the “free” top-ups of tax relief and employer contributions.

Time out of work when starting a family

The MoneyAge report suggests that women spend 10 years out of work, on average, raising a family.

Recent research from Aviva, meanwhile, found that the gender retirement gap starts, and then begins to grow, from age 35.

Time out at this stage of a career can have the exponential effect of decreased contributions alongside missed opportunities for career progression and the higher wages that follow.

Women live longer than men but spend more years in ill health

According to the Office for National Statistics (ONS), the current UK life expectancy at birth is almost 4 years more for a female – 82.9 years for women compared to just 79 years for men.

For those aged 65 currently, the gap decreases to around 2.5 years, but that’s still a significant increase in required income. A woman planning to retire on £30,000 a year could need an additional £75,000 of pension benefits.

There is the issue of later-life care too. The Centre for Ageing Better confirms that women will, on average, live longer in ill health. This increases the potential cost of later-life care.

Expert financial advice can help you to close the gender pension gap

At Ermin Fosse, we help our clients to live the life they want now while planning for their ideal retirement, whatever their circumstances.

1. Start early

The key to building a large retirement pot is to start contributing as early as possible. The later contributions start, the higher the percentage of monthly income that will need to be put aside.

An early start means more time for potential investment growth and a longer period over which the effects of compounding can build.

2. Increase your contributions

Pensions are tax-efficient. Tax relief is applied to contributions at the basic rate, though higher, or additional-rate taxpayers can claim extra relief through their self-assessment tax return.

While the cost of living crisis is leaving many households struggling financially at the moment, continuing to pay our future selves is vital. Simple budgeting techniques and a firm grasp on household cashflow can help highlight ways to cut back and release additional disposable income.

3. Don't forget your workplace pension

Auto-enrolment has helped millions of employees to begin saving for their future, and yet 17% of female workers are currently ineligible.

Making the most of a workplace pension, if you are eligible for one, can make a real difference to the size of a pension pot at retirement.

Auto-enrolment contributions receive tax relief, as well as the “free” top-up of an employer contribution. Current minimum contributions are 5% for the employee and 3% for the employer, but some employers might be willing to increase their contribution if an employee does too.

4. Look beyond your pension savings

Income in retirement doesn’t need to comprise pension savings alone. A holistic financial view means considering current and potential income streams.

This might include ISAs, which have tax benefits too. There is no tax to pay on interest earned in a Cash ISA. With a Stocks and Shares ISA, meanwhile, gains are free of both Income Tax and Capital Gains Tax.

ISA investments, cash savings, money from an inheritance, or regular income from buy-to-let properties can all be factored into a comprehensive retirement plan.

Be sure not to focus on pensions alone.

Get in touch

At Ermin Fosse, we have many years of experience of helping our clients build a retirement plan aligned with their goals.

If you’re worried that the gender pension gap could affect your ability to retire in the way that you like, get in touch now. Email to find out how we can help.

Please note

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

This article is distributed for information purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily Ermin Fosse and does not represent a recommendation of any particular security, strategy or investment product. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed. Errors and omissions excepted.

Please contact us before you invest / disinvest.

Ermin Fosse Financial Management LLP is authorised and regulated by the Financial Conduct Authority Financial Services Register No: 197438

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