The gender pension gap starts at 28. Here’s how you can close it before it’s too late

The gender pension gap is one of the largest issues facing female financial planning clients; institutionalised problems like the gender pay gap and life events like career breaks or childcare are placing women at a severe disadvantage when it comes to building long-term retirement wealth.

Now, new Pensions Age research points to the gap starting as young as 28 years old, reinforcing the importance of long-term planning as a solution.

With this in mind, keep reading to learn the reasons for the gender pension disparity, as well as several strategies, like partner support and salary sacrifice, which can help you, your daughter, or granddaughter practically overcome this gap.

The gender pension gap is £69,060 on average for those aged between 50 and 54

The gender pension gap measures the percentage difference in retirement income or accumulated pension wealth between women and men.

This gap becomes wider the older you get; Pensions Policy Institute reports that between the ages of 50 and 54, the median pension wealth for women is £88,355. For men, it’s £157,415.

There are three distinct factors that influence this disparity.

1. The gender pay gap

One of the primary drivers of pension inequality is the difference in pay between men and women.

According to the Office for National Statistics (ONS), in April 2025, the gap stood at 6.9%. This is due to factors like:

• Occupational differences: women are frequently concentrated in lower-paying sectors
• The “motherhood penalty”: lost earnings, fewer promotions, and hiring bias due to becoming mothers
• Burden of unpaid care work: women are more likely to take time off to care for children or relatives

These economic disadvantages make it more difficult for women to build pension wealth without jeopardising their spending power in the present.

2. Career breaks

Women are also more likely to take a career break. According to Pensions Age, 58% of women at or near State Pension Age reported at least one career break, compared to 12% of men.

This is often to raise children – the ONS reports that 29 is the average age at which women usually leave work to start a family. Similarly, menopause and perimenopause also cause many women to take time off during their prime earning years.

If unplanned for, a career break can be costly. The same Pensions Age research revealed that a woman taking a five-year career break at age 35 is projected to reach 67 with a pension pot £70,000 less than a woman who remained in continuous employment.

3. Part-time working patterns

According to the Commons Library, 37% of employed women worked part-time, compared with 14% of men.

As with a career break, women often reduce their working hours to provide additional childcare or healthcare support for a loved one. Doing so can also significantly reduce the amount they contribute to their pension compared to if they worked full-time.

Partner support can help you keep up with pension contributions if you take time away from work to look after children

If you are in a relationship, civil partnership, or married, and decide to take time away from your career or reduce your working hours to become a primary caregiver, you could share responsibility for your pension with your significant other.

This means that your contributions are supplemented by your partner rather than you suffering a shortfall.

For example, if you take time off work for maternity leave, you could continue paying your pension out of your maternity pay, and your partner could make up the difference.

Likewise, if you reduced to part-time hours to help look after your children once they reached school age, your partner could also supplement your pension contributions to an amount similar to your full-time pay.

Planning your finances together can help reduce the financial burden of taking the necessary time off work and worrying whether doing so will jeopardise your long-term goals.

Maximising pension contributions can help you regrow your pension once you return to work

If you return to the workforce with a pension shortfall, there are two main strategies you can implement to help you restore your retirement wealth.

The first and most practical option to boost your pension is to increase your workplace pension contributions.

If, for instance, you stopped contributing to your pension for a year, which created a savings gap of £6,000, you could increase your subsequent monthly contributions by £250. This would pay off your pension savings gap in 24 months.

If your career break is planned, you could also increase your contributions before you take time off. This has the additional benefit of exposing your pension to the effects of compound interest for longer.

Likewise, it’s important that you prioritise tax efficiency when reclaiming missing pension funds.

Salary sacrifice is the process of reducing your salary in exchange for financial benefits, like increased employer pension contributions. Reducing your salary in favour of pension contributions can cut down on your exposure to Income Tax while also allowing you to benefit more from pension tax relief opportunities.

However, it’s important to note that an annual £2,000 cap is being introduced on salary sacrifice from April 2029, and any contributions in excess of this cap will be liable for employee and employer National Insurance (NI).

Additionally, salary sacrifice also has two drawbacks to consider:

• Downgraded company benefits – Corporate benefits like Death in Service (DIS) pay out lump sums based on multiples of your salary on death, so a salary cut could reduce the amount your family would receive.
• Reduced buying power – this may impact your ability to receive a mortgage, as offers are usually based on gross salary.

Get in touch

We understand that the issues affecting women’s pensions are often systemic rather than personal.

But that doesn’t mean we will sit idle and let your pension wealth be affected by elements outside of your control.

Our award-winning team will help you identify and implement strategies to ensure your pension wealth meets your future objectives while also accommodating any short-term goals.

Find out more about how we can help you practically close the gender pension gap by emailing us at hale@kelland.co.uk or calling 0161 929 8838.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

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