The gender pensions gap is not a new crisis. It has quietly widened over decades, deepening with each generation of women who pass through a system never built with their needs in mind.
At now:pensions, our research has tracked this widening divide. In 2019, women retired with £101,000 less than men; today the gap stands at £136,000. To match the typical man’s pension, a woman would need to work an additional 18 years in full-time employment, increasing to a staggering 28 years for single mothers.
But new findings from our She’s Earned It report reveal something even more troubling: only half of UK adults believe the gender pensions gap even exists. Among women themselves, awareness is just 56%. Not only is this crisis very real, public consciousness of it remains dangerously low.
This is not a marginal disparity. It is the predictable outcome of a pension model built on assumptions about work, family and income that have never reflected the lived reality of millions of women.
All of this is compounded by the fact that women live longer than men (seven years more on average) and retire with far less. The risk of outliving their income is not hypothetical; it is a certainty that successive generations of women have experienced.
Why is the pensions system so unfair when it comes down to gender?
Automatic enrolment transformed pension saving and stands as one of the UK’s most successful policy interventions in decades. Over 21 million people are now saving into a workplace pension, a number that would have been unthinkable in the years before 2012.
Yet automatic enrolment was designed for traditional full-time roles, long-term employment and linear careers. It assumes a workforce that starts early, progresses consistently and remains in stable employment until retirement.
That model may have once been common for men, but it never has been for most women, failing to account for career breaks, part-time work, or leaving the workforce altogether. The system’s rigid eligibility rules leave 2.5 million working women excluded from automatic enrolment today.
Meanwhile, policy changes announced in the latest Budget risk widening inequalities further. The introduction of a £2,000 cap on salary-sacrifice pension contributions from 2029 will increase National Insurance payments for both employees and employers.
Recent analysis by Pensions Policy Institute (PPI) has shown that in real terms, that means someone earning a projected median salary of £43,000, and who sacrifices 10% of their salary, would lose £184 a year, and their employer £344 a year. These changes introduce new friction into a system that should instead be encouraging higher levels of saving, not deterring it.
We also cannot overlook the impact of divorce on women’s long-term financial security. Property is often prioritised during divorce negotiations, leaving women asset-rich but income-poor.
Pensions are frequently forgotten, misunderstood or dismissed, despite being the second most valuable family asset. More than 100,000 marriages end each year, yet more than 70% of couples finalise their separation without a pension-sharing order.
The omission follows women for the rest of their lives: divorced women retire with just half the pension savings of other women and only 14% of the pension wealth of men.
Work that works for women
There is, however, significant opportunity for progress if we reshape the world of work to recognise the reality of women’s lives.
Flexible working is one of the most powerful tools available. The 2024 changes to the Code of Practice update to the Employment Rights Act gives employees the legal right to request flexible arrangements that are meaningful, but its success depends entirely on whether employers see flexibility as an investment in talent rather than a management burden.
When women can remain in the workforce, progress in their careers and increase their earnings, the ripple effects accumulate across decades. Enabling women to work in ways that align with caring responsibilities is not simply a family policy; it is a lifelong financial policy.
Ensuring that pensions are automatically considered during divorce is another essential reform. Women cannot afford to lose decades of retirement security due to administrative omission or unequal negotiation.
Our pension system must also evolve to reflect the modern workforce by removing the £10,000 earnings threshold, lowering the minimum age and including income from multiple jobs.
These changes are not radical. They are overdue and they are fair. They reflect the basic principle that everyone who works should be able to save for later life, no matter how their work is structured.
A new model
The gender pensions gap is not closing on its own. It is widening. And it will continue to widen unless the UK confronts the structural inequities embedded in both the labour market and the pension system.
Women do not need to work until they are 83 or start earning at the age of three. They need a system that does not penalise them for caring, for working part-time, for living longer or for earning less.
A system built for women is, in fact, a system built for everyone. It acknowledges the real rhythms of modern working life, not the imagined stability of a bygone era.
I will continue to push for these urgent reforms because fairness is not something to wait for patiently. It is something to model from the start.
