AvivaMar 3 2023

Women's pension pots just over half the size of men's

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Women's pension pots just over half the size of men's
Pexels/Tim Mossholder

The gender pension gap begins to widen significantly from the age of 35, and there are still gaps between how much women pay into their pension compared to men.

According to data from Aviva, the gap between women’s and men’s pension contributions for 35 to 39-year-olds is 21 per cent, up from 18 per cent last year.

It then increases to 24 per cent for 40 to 44 year-olds and 27 per cent for 45 to 49 year-olds before stretching to 32 per cent for 50 to 54 year-olds.

The amount paid in pension contributions has a big impact on retirement income, and the difference between women’s and men’s contribution rates is stark, according to Aviva.

The gap between women and men’s pension contributions

AgeJan 2022Jan 2023
20 - 2413%15%
25 - 2916%15%
30 - 3415%17%
35 - 3918%21%
40 - 4423%24%
45 - 4929%27%
50 - 5435%32%
55 - 5940%35%
60 - 6445%38%
Source: Aviva

The data also found the gender pension imbalance persisting into retirement with women aged 60 to 65 years old having pension pots which are on average just over half (57 per cent) the size of men’s pots at the same age.

Michele Golunska, managing director for wealth and advice at Aviva, said: “This suggests a clear line in the sand around the age that women are often making milestone career and childcare decisions and considering opting to work part-time.

“Pension contributions are unlikely to be a deciding factor when considering whether to work part-time, but what is important is that the long-term impact on a pension is understood when making that decision. 

“This is crucial to good financial planning.”

Golunska said it was encouraging to see the gap in contributions from age 45 has reduced, compared to last year. 

 We would like to see the government find a suitable definition of the gender pension gap alongside a metric for measuring progress on reducing the gap.

“This might suggest there are some women who are recognising they have a gap in their pension contributions and are taking action to help reduce it,” she said.

In order to tackle this, Golunska said some might consider upping their pension contributions, but this would have to be carefully balanced against disposable income. 

“An option that some parents may consider is sharing the caring responsibilities to help spread the long-term impact on pension savings,” she said.

Aviva’s Working Lives Report, published in June, found that women were significantly more likely to say that their workplace pension will not provide enough for them to have a comfortable retirement (40 per cent of women versus 28 per cent of men). 

It found that younger employees were more willing to speak to their employer about financial concerns while three quarters of employees (73 per cent) have never spoken to their employer about financial wellbeing.