Is women’s retirement outlook finally improving?

In 2024, in our 20th Women and Retirement Report, we calculated that it would take at least another 20 years before the gender pension gap could be closed. Two years on and we have some tentative green shoots to consider, thanks to the state pension and better parity on pay. However much remains to be done to get to social parity and sharing of the load on caring responsibilities. While 33% of women still fall short of the minimum quality in retirement, we will continue to collaborate across the industry to effect changes which close the gender pension gap.

In this year’s report we explore the challenges that still remain. Caring responsibilities, menopause, relationship breakdown and low financial resilience all disrupt women’s working lives and their ability to save for retirement.

Caring responsibilities often reshape women’s working lives. Among parents, more than two-thirds (68%) of mothers say they made more childcare-related changes than their partner. In addition, more than two in five (42%) women have provided adult care, compared with 31% of men. Among women who have provided adult care, two in five (40%) changed how they worked because suitable or affordable care was hard to access. More than one-quarter (27%) took time away from work and around one in seven (14%) reduced their hours. National Insurance credits can protect a carer’s State Pension record, and there may be an opportunity for them to be better utilised as only around two-fifths (39%) of women currently providing adult care had heard of them, and just around one in 10 (11%) had claimed or received them.

Menopause is another point where timely support could make a difference during important pension-building years. Among women experiencing peri-menopause or menopause symptoms, half (50%) say their working life was affected to a moderate or very large extent, and around three in 10 (29%) report a negative effect on their retirement savings.

A relationship breakdown can also affect retirement preparation, particularly where pensions are overlooked. Among those who are currently divorced or who have ever divorced or dissolved a civil partnership, one-quarter (25%) of women say their retirement preparation worsened, compared with 16% of men. Yet pensions are often absent from financial discussions: nearly one in four (23%) divorced respondents did not discuss them, and around one in six (17%) had no formal financial settlement.

Menopause is another point where timely support could make a difference during important pension-building years.”

Building women’s financial resilience can make it easier to absorb these changes without sacrificing long-term saving. More than one in three (37%) women feel financially secure, compared with 45% of men. Just over half (55%) could meet an unexpected £1,000 cost, against 64% of men. Lower financial buffers can make it harder to maintain pension contributions when earnings fall or costs rise.

Differences in pension saving can emerge early in women’s working lives. Analysis of Lloyds Banking Group data shows that young women are more likely to earn below the automatic-enrolment threshold, with 14% of women under 30 earning less than £10,000, compared with 9% of men. Even once enrolled, differences persist: 71% of women aged 22-25 in Scottish Widows workplace pensions contribute 10% or less, compared with 64% of men. This highlights an opportunity to engage younger women early, helping them build good saving habits and benefit from more years of pension investment growth.

Better information can also help women act earlier. Around three in 10 women (29%) have found a retirement-planning tool helpful. Yet almost half (47%) of women who made a career change linked to care, menopause or divorce said they had little or no understanding of how it might affect their pension. Giving women clearer information before these decisions are made creates an opportunity to protect pension saving and rebuild it afterwards.

There is a real opportunity to engage today’s younger women through digital channels, making it easier for them to start saving for their retirement early and instil good behaviours. Around three in 10 (28%) women aged 18-34 have found a retirement planning tool helpful, and those who have are almost twice as likely as older women to name an AI tool. Younger women who found retirement tools helpful are also almost twice as likely to expect to maintain their standard of living in retirement as those who use no tools (38% versus 19%). These are the years which can have most impact, and by building your future wealth early on in your working life will pay off in years to come.

Partners can also be valuable allies in women’s retirement planning. Around two-fifths (42%) of women in a relationship have received their partner’s support to plan and save. Partner support is associated with greater confidence in managing retirement savings. Among women in relationships, more than six in 10 (65%) who feel supported are confident about managing their retirement savings, compared with only around one-third (34%) who haven’t been supported by their partner. Further, among women who have a shared understanding with their partner of how they will fund retirement, around half (54%) expect to maintain their standard of living, compared with just 14% of those who do not.