- New analysis from the Department for Work and Pensions (DWP) shows the gender pensions gap in private pensions – the difference between the private pension wealth of men and women who have pension savings aged 55-59 – was 48% between 2020 and 2022
- This equates to a difference of around £5,000 in annual income at age 60
- The gender pensions gap rose to 62% when including those who don’t have any private pension wealth
- It is smaller for younger age brackets (22% for ages 25-29) but rises significantly as women age (52% for ages 45-49)
- The gender pensions gap is smallest for those who only hold defined benefit (DB) pension wealth (39%), and largest for those who only hold defined contribution (DC) pension wealth (75%)
- Percentage contribution rates to both public and private sector pensions are roughly the same for men and women, but women build up smaller benefits as they tend to have smaller salaries
Rachel Vahey, head of public policy at AJ Bell, comments:
“The government’s latest research paints a bleak picture for women approaching retirement, with the gap between the private wealth held by those approaching retirement standing at a truly appalling 48%.
“Although automatic enrolment has done its bit in creating more female pension savers, boosting the number of women to pay into a pension, the analysis clearly shows that the wheels come off women’s retirement saving when they start a family. The gap is much smaller at younger ages, at 22% for those aged between 25 and 29, but rises dramatically for older women.
“Part of this is because these women haven’t been able to benefit from automatic enrolment for all their working lives. Reassuringly, in a post-2012 world, the research shows women save around the same percentage of salary as men into a pension. But despite this, a key reason they are falling behind men is because women earn less and work fewer hours. Their salaries are lower and therefore the money they are investing or the benefits they are building up are smaller.
“Those women who work in the public sector fare better. The gender pensions gap for those that only hold defined benefit pensions – now mostly only available to public sector workers – is much lower at 39% than those who only have defined contribution pensions at 75%. This throws into stark relief the chasm between private sector workers and their public sector counterparts.
“The gender pensions gap is not a new problem. The government and industry have struggled with this for decades.
“There are ways of potentially narrowing the gap. For example, changing risk warnings to be more appropriate for a female audience. The government should also consider reducing the trigger earnings limit of £10,000. Some women have several part-time jobs bringing their total earnings over the limit, but because each job’s salary falls below £10,000, they are frozen out of automatic enrolment.
“A 48% gender pensions gap is quite frankly unacceptable. Tackling this needs to be a significant part of the Pension Commission’s work as it relaunched today. For too long government has acknowledged this gap but failed to tackle it head on.
“But change must also come from the labour market, such as through pay, affordable childcare and more shared parental leave. Until all of these factors are addressed, the gender pensions gap will continue to exist.”
Measuring the gap
This report looks at the Gender Pensions Gap (GPeG) in private pensions in Britain from 2020 to 2022. The GPeG is the difference between the median private pension wealth of men and women aged 55 to 59. In this period, the gap was 48%.
The data comes from the Office for National Statistics’ Wealth and Asset Survey, but the Covid-19 pandemic affected data collection, making some results less certain. Estimating pension wealth, especially defined benefit pensions, is complex, and the method has changed, making comparisons with past data difficult.
This report does not cover the state pension, but notes that changes in 2016 have reduced the gap in state pension payments. It measures uncrystallised pension wealth around normal retirement age (55 to 59), excluding those with no pension wealth. If those with no pension wealth are included, the gender pension gap would rise from 48% to 62%.
What the research tells us
The research shows that for the period between 2020 and 2022 women aged 55 to 59 have built up a private pension fund of £81,000 compared with £156,000 for men. Applying an annuity rate of around 7% would convert these pension pots into an annual income for a 60-year-old of around £6,000 for women and around £11,000 for men – a difference of £5,000 a year.
Private pension wealth for women with defined benefit pensions only is £183,000 for men compared to £111,000 for women. But for those only with defined contribution pensions this plummets to £19,000 for women and £75,000 for men, showing the value of defined benefit pension schemes.
Almost four-in-five (78%) women around normal minimum pension age (NMPA) have private pension wealth in some form, compared to 82% of men. However, their pension contributions are slightly lower than men’s – in the private sector the median contribution rate for automatic enrolment eligible women is 8% compared to 8.9% for men, and in the public sector the equivalent figures are 25.1% compared to 27.3%.
The female employment rate is lower; women are more likely to work part time, fewer hours, and earn less, especially when they reach their 30s and take on childcare responsibilities. However, there are now a greater number of women who are in work and fewer are working part time – 42% were working part time in 2006 compared to 35% in 2025.
