Mid-life women face growing pension gap

The latest pension contribution data from leading workplace pension provider Aviva^[1] has found the gender pension gap is closing, but the rate of progress is slow and inconsistent across different age groups.

Based on Aviva’s workplace pension data for 5.5 million pension policies^[2], on average men contribute over a quarter (27%) more than women into their pension savings every month. The pension contribution gap between women and men over the past four years, since 2022, has reduced overall by around only 1%. The gap for women over 45-years-old has reduced by an average 4%.

However, the gap has increased for women aged between 30 and 45-years-old by an average 3%.

This is in line with the record highest average age of mothers having children, which is now just over 30-years-old^[3]. Women (36%) are also more likely to work part-time than men (14%)^[4]. Taking a career break or reducing working hours can impact pension contributions.

The difference in pension savings between women and men starts at 20-years-old, with a 15% gap. It begins to widen significantly in the mid-thirties (22%). The amount paid in pension contributions can have a significant impact on retirement income and the gap increases consistently over time, all the way through to retirement, with the gap at its widest from around 60-years-old (Table 1). 

Aviva data also found the gender pension imbalance can persist into retirement with women from 60-years-old having pension pots which are on average 43% less than men’s pots at the same age^[5]. Aviva’s Working Lives Report (2024) found almost two in five (38%) women said their pension will not provide enough for a comfortable retirement, compared to a quarter of men (25%)^[6].

Laura Stewart-Smith, Head of Pension Engagement, at Aviva said: “There are positive signs the gender pension gap is closing, albeit slowly. This progress might be because people are now more aware of the impact that career breaks or working fewer hours can have on workplace pension savings. However, the gender pension gap continues to persist for women in their thirties and early forties, and this could reflect a time of life when people often make significant choices about career and childcare.”

Aviva has announced today it has launched a new career break feature for its workplace pension customers, which is now available to those checking their pension savings online through Aviva’s online portal or app^[7]. As part of its retirement savings calculator, it shows customers the potential impact on their pension pots and retirement income if they were to have a career break or reduce their working hours.            

Laura Stewart-Smith said: “Pension contributions are unlikely to be a deciding factor when considering whether to take a career break or reduce working hours, but anyone making these decisions should take the time to understand the long-term impact on their retirement savings. Good pension planning is key for anyone who wants to have a comfortable retirement. Which is why our new career break feature is designed to help our workplace pension customers get ready for their retirement planning.”

Roadmap for auto enrolment changes would give employers and pension savers time to plan

In 2023, the Pensions (Extension of Automatic Enrolment) Act introduced powers to remove the automatic enrolment (AE) lower qualifying earnings threshold (LET), which would have a significant impact on contribution rates, particularly for those workers who have opted to work part-time. The change would mean workplace pension savers would get an employer pension contribution from the first pound they earn.

Laura Stewart-Smith said: “Bringing men’s and women’s pension contributions closer together is slow progress and at the current rate it could be a quarter of a century before we see parity. Incoming auto-enrolment reforms will help to bring added momentum, and we would like the government to put a roadmap in place for how and when it will implement changes. These changes will need to be implemented gradually, and a clear roadmap would give employers and pension savers time to plan, which will help to ensure better retirements for millions of workers.”         

Aviva: How to help close your pension gaps

• If you are working part-time and automatically enrolled into a workplace pension scheme, consider increasing your monthly contributions, if it is affordable.
• If you earn less than £10,000 per year, speak to your employer about your options for joining your company pension scheme.
• If you are thinking about reducing your working hours to help balance family life, you might want to consider whether it is better for you or your partner to work part-time. As part of those considerations, you might want to look at which of you gets higher employer pension contributions.
• When it comes to saving into a pension, starting early allows a small contribution to build up over time.
• For those in a long-term relationship, have a stake in your finances. Should divorce ever come into the picture, keep pensions at the forefront of your mind when splitting assets. Sharing pensions as part of a divorce or dissolution of civil partnership the same way as any other wealth does not happen by default. Aviva found one in seven people (15%) did not realise their pension could be impacted by getting divorced and a third (34%) made no claim on their former partner's pension when they divorced^[8].
• Check your National Insurance record to see if you will get the full State Pension amount when you retire. You need a total of 35 years of National Insurance contributions, or, in some cases, you can apply for credits. If it looks like you might be short, you might have the option to pay to fill in the gaps.
• Consider applying for child benefit even if your overall household income means you need to pay it back through a high-income child benefit charge. If you are not working while looking after a child, you get state pension credits automatically until your youngest child is 12 years old if you are claiming child benefit. If you do not claim child benefit you do not receive the credits.
• Talk to your employer about the policies they offer. For example, Aviva offers six months’ equal parental leave irrespective of gender, alongside salary exchange - which means employees who might only receive statutory maternity pay for part of their parental leave maintain full pension contributions.
• Make use of digital technology to help understand if you are on track for a financially comfortable retirement. Aviva’s online retirement tools My Retirement Planner and Shape My Future are free to use.

-ends-

References:

^1. _{Corporate Adviser Master Trusts and GPP Defaults Report | April 2025 | Aviva remains the biggest DC provider in terms of bundled assets, at £130bn. [↑]}

^2. _{Aviva Workplace Pension Data | Jan 2025 | Percentage difference in mean total contributions paid in January 2025, women compared to men, and mean pension pot size men vs women, by age group. Based on a sample of 5.5 million workplace pension plans. [↑]}

^3. _{Contains public sector information licensed under the Open Government Licence 3.0. Office for National Statistics | 28 Oct 2024 | Births in England and Wales: 2023 [↑]}

^4. _{Contains public sector information licensed under the Open Government Licence 3.0. House of Commons Library | 28 Feb 2025 | Women and the UK Economy [↑]}

^5. _{Aviva’s career break feature is only available to its workplace pension customers: MyAviva or MyWorkplace (online portal or app): Wealth - Workplace Retirement Account - More from your Pension - The future of your pension - Retirement Forecaster - Retirement Savings Calculator (career break feature) [↑]}

^6. _{Aviva Workplace Pension Data | Year End Dec 2024 | Percentage difference in mean pension pot size of men compared to women, by age group. Based on a sample of 5.5 million workplace pension plans. [↑]}      

^7. _{Aviva Working Lives Report 2024: Working for the Future | Sep 2024 | Methodology: 1,011 full or part time employees aged 16+ in the private or charity sector (excluding sole traders) were interviewed by Censuswide between 02‑16 April 2024. Censuswide abides by and employs members of the Market Research Society which is based on the ESOMAR principles and are members of The British Polling Council. All interviews were conducted online. The sample was targeted, and data weighted back to these targets, to ensure a comprehensive cross-section of the UK working population. Where appropriate, some statistics have been combined to make a net score, for example ‘Strongly Agree’ and ‘Somewhat Agree’ combined to make ‘Agree’. [↑]}

^8. _{Aviva | 03 May 2022 | Thousands risk pension poverty after divorce [↑]}

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