Key Takeaways:

• The Gap is Real: On average, women in their 60s have pension pots 43% smaller than men of the same age.
• The Income Reality: This translates to a retirement income of approximately £13,000 for women versus £19,000 for men—a 32% shortfall.
• The “Motherhood Penalty”: A 5-year career break can reduce a woman’s pension wealth at retirement by over £65,000.
• Part-Time Pain: Women are significantly more likely to work part-time and earn below the £10,000 auto-enrolment threshold, missing out on employer contributions entirely.
• The Solution: Partners can contribute to each other’s pensions. The 2026 theme “Give To Gain” is the perfect reminder to balance household wealth before the tax year ends.

Introduction: The 43% Gap We Cannot Ignore

This Sunday, March 8th, was International Women’s Day. The global theme for 2026 is “Give To Gain”—focusing on how generosity and support create a better society for everyone.

While we often think of this in terms of social justice, as a Financial Adviser, I see it as a mathematical reality for families in Worcester.

The “Gender Pension Gap” is not just a buzzword. It is a compounding financial problem that leaves women significantly more vulnerable in later life than men.

• Recent data reveals that by age 60, the average woman has a pension pot 43% smaller than the average man.
• While the Gender Pay Gap is slowly narrowing (sitting around 7% for full-time workers), the Pension Gap remains a chasm.

Why? Because pensions reflect a lifetime of earnings, and for many women, that lifetime includes career breaks, part-time work, and caring responsibilities that the current system punishes financially.

1. The “Motherhood Penalty” (and the £70k Cost)

The single biggest driver of the gap is childcare. When a woman takes a career break to raise children, two things happen to her pension:

1. Contributions Stop: The monthly drip-feed of cash into her pot halts.
2. Compound Growth Slows: She misses out on the early growth that drives wealth.

The figures are stark. Taking a standard 5-year career break in your 30s can result in a pension pot that is £65,000 to £70,000 lower by the time you retire.

The Auto-Enrolment Trap Even when women return to work, they are far more likely than men to return part-time. If you earn less than £10,000 a year (from a single job), your employer does not have to automatically enroll you in a workplace pension.

• Result: Millions of women working two or three part-time jobs may be earning £20,000+ in total, but receiving zero employer pension contributions because no single job hits the trigger.

2. The “Good Girl” Savings Trap

There is also a behavioral gap. Research consistently shows that women are better savers than men, but men are often more aggressive investors.

• Women are more likely to hold cash ISAs or savings accounts.
• Men are more likely to hold Stocks & Shares ISAs.

In the short term, cash feels safe. But over a 30-year timeframe, inflation destroys cash. By playing it “safe,” many female savers are inadvertently guaranteeing that their wealth grows slower than their male counterparts.

• Insight: If you are saving for a retirement 20 years away, volatility is not your enemy; inflation is. You need your money to work as hard as you do.

3. Divorce: The Silent Wealth Destroyer

We cannot talk about the pension gap without mentioning divorce. For many couples, the family home is the visible asset, and the pension is the invisible one.

• 15% of people do not realise their pension can be impacted by divorce.
• 34% of women make no claim on their former partner’s pension.

If a husband has built up a £500,000 pension while the wife took career breaks to raise the children, that pension is a joint marital asset. Walking away with the house but no pension often leaves women cash-rich but income-poor in retirement.

4. “Give To Gain”: How to Fix It Together

This year’s IWD theme, “Give To Gain,” offers a practical solution for couples. If you are in a partnership where one earns significantly more than the other, you can use the pension system to balance the scales (and save tax).

The Strategy: A higher-earning partner (usually the husband in these statistics) can contribute to the lower-earning partner’s pension.

• Tax Relief: Even if the lower earner has no income, you can contribute up to £2,880 a year into their pension. The government automatically tops this up to £3,600 (adding £720 in basic rate tax relief).
• The “Gain”: You are effectively getting free money from the government to balance your household wealth.
• Future Tax: By equalising your pension pots, you ensure that in retirement, you can both use your personal tax allowances. If one person holds all the wealth, they will pay higher tax on withdrawals while the other person’s allowance is wasted.

5. Don’t Forget National Insurance Credits

If you are a parent claiming Child Benefit for a child under 12, you automatically receive National Insurance (NI) credits. These count towards your State Pension history.

Crucial Warning: If the higher earner (who claims the Child Benefit) earns over £60,000, they might opt out of receiving the cash to avoid the “High Income Child Benefit Charge.”

• Do not just “cancel” the claim. You must fill out the form to claim the credits only.
• If you simply stop claiming, the stay-at-home parent stops receiving NI credits, potentially creating a gap in their State Pension record.

FAQs

Q: Can my husband pay into my pension directly? A: Yes. He can pay into your Personal Pension or SIPP. The payment is treated as if you made it, meaning it receives tax relief at your marginal rate (usually 20%). However, total contributions cannot exceed 100% of your earnings (or £3,600 if you have no earnings).

Q: What happens to my workplace pension during maternity leave? A: This is one of the few times the system works in your favor. Your employer must continue to pay pension contributions based on your pre-maternity full salary, even if your actual pay has dropped to Statutory Maternity Pay (SMP). You, however, only pay contributions based on the actual pay you receive.

Q: I work two part-time jobs. Can I combine them for a pension? A: No, the £10,000 auto-enrolment trigger applies per employer. However, you have the right to ask to join the scheme. If you earn over £6,240, your employer must let you join and must contribute. Do not wait to be asked—ask them!