A recent report by Scottish Widows presents a sobering reality: over 2 million women in the UK don’t believe they will ever afford to retire. This starkly highlights the gender pensions gap, which leaves 42% of women at risk of poverty in retirement compared to 35% of men.
The average woman is are on track to receive just £12,000 per year in today’s money during retirement (after paying income tax and household expenses), compared to £17,000 for the average man. According to the Pensions and Lifetime Savings Association, a single person needs an annual income of £14,400 to meet the minimum standard of living in retirement. For a moderate lifestyle, the figure rises to £31,300, and for a comfortable lifestyle, £43,100.
Nearly 1 in 7 women expect to work beyond the state pension age of 66 simply to make ends meet. The reasons are clear. The “motherhood penalty” and high childcare costs significantly impact lifetime earnings. Women are also overrepresented in part-time roles that fail to meet the £10,000 earnings threshold for automatic pension enrolment. Moreover, pensions are often overlooked in divorce settlements, leaving many women financially vulnerable.
But there is hope. Innovative solutions are beginning to shift the narrative. For example, Scottish Widows’ TikTok campaigns have effectively engaged younger women with humorous and relatable content, such as their “Pay Your Pension Some Attention” initiative. These efforts are making an impact with video content driving over 500,000 clicks to their website.
what can you do?
Read my books, What Every Woman Needs to Know to Create Financial Abundance and 10 Things Everyone Needs to Know About Money. My Healthy Money courses also provide guidance on saving for retirement at any stage of life.
Use tools like the government’s State Pension Forecast or digital pension dashboards to consolidate accounts and adjust your savings strategy.
Break the money taboo by openly discussing money matters, including pensions.
Advocate for change: since auto-enrolment was introduced in 2012, pension participation rates among eligible female workers have doubled. However, many women in lower-paid or part-time jobs still fall below the £10,000 threshold for automatic enrolment. Campaigning to lower this threshold and increasing mandatory contributions from 8% to 12% could make a significant difference.
The gender pensions gap is a systemic issue, but financial literacy and awareness are powerful tools for change. Together, we can empower women to take control of their financial futures.
Retirement shouldn’t just be a distant dream. It should be a time when we can enjoy the little things in life, like a glass of wine while people-watching! Let’s make it a reality for everyone by closing the gender pensions gap.
Have questions? Let’s discuss in the comments.
Money Mastery Method with Linda Davies 
Leave a comment