3 retirement “gaps” women face and how to close them using financial planning
While gender equality has improved, three major gender gaps remain for women planning their retirement. Learn what they are, and how financial planning can help you overcome each.
The financial challenges facing women are nothing new.
While there has been significant progress in closing the economic divide between men and women, several major gaps still exist, impacting earnings potential, financial security, and freedom.
Over the long term, these gaps can amount to a significant shortfall in savings. This means you may need to work for longer to achieve your goals.
Keep reading to learn about the three largest gaps impacting your retirement wealth as a woman today and how financial planning can help you overcome each of them.
Gap 1: Pay
The gender pay gap is arguably the most talked-about financial obstacle impacting women today.
According to Office for National Statistics (ONS) data, the gap has reduced by a quarter among full-time employees over the last decade.
Yet a gap still exists – most recently, it was recorded as 6.9% (April 2025).
The gender pay gap is caused by reasons such as:
- More men occupying high-paying roles than women
- Women being more likely to work part-time or act as unpaid carers
- The “motherhood penalty”: women who take time off to look after children often face slowed career tracks
- The cost of menopause (according to gov.uk, 14% of women experiencing menopause reported reducing their hours).
Earning less on average than your male counterparts while performing the same roles and responsibilities might make you feel angry, confused, or helpless.
From a financial planning perspective, less income means that you may not be able to contribute as much towards your goals, which could slow down progress to retirement.
How Kellands can help…
While the gender pay gap is an institutional problem, financial planning can help you maximise your savings potential by boosting the tax efficiency of your pension wealth.
This could mean claiming eligible relief from HMRC and making full use of your Annual Allowance (£60,000 for the 2026/27 tax year, subject to your circumstances).
Learn more about how to boost your pension’s tax efficiency: 3 helpful financial habits to put you on the front foot in the 2026/27 tax year
Investing tax-efficiently can help you generate more substantial long-term growth so you can achieve your goals efficiently.
Gap 2: Pension wealth
Women have lower pension savings on average than men.
The Organisation for Economic Co-operation and Development (OECD) represents 38 member countries across the world, including the UK. According to their research:
- Women receive monthly pensions that are one-quarter lower than men’s on average across OECD countries
- The large average gender pension gap (GPG) across OECD countries was 23% in 2024
- Gender differences in lifetime earnings are the main driver of the gender pension gap.
Career breaks add to this. According to Professional Paraplanner, women who take career breaks face a pension gap of up to £30,000. Additionally, 42% of women are out of work for more than five years, compared with just 10% of men.
Less pension wealth means that women could be forced to work longer or face less freedom of choice in retirement. This means women may be forced to compromise their retirement lifestyle in ways that men may not.
How Kellands can help…
Even if you maximise the allowance that applies to you and claim eligible tax relief on your pension contributions, you still might be facing a retirement gap.
You might supplement your pension wealth by taking advantage of additional investment opportunities, such as a Stocks and Shares ISA.
Stocks and Shares ISAs benefit from compound investment growth free from Income Tax, Capital Gains Tax (CGT), and Dividend Tax. Each year, you can contribute up to the ISA subscription limit of £20,000 (2026/27).
Your financial planner can help you create well-rounded retirement wealth through a bespoke pension and ISA investment strategy. This can help you make stable, long-term, and tax-efficient gains to close your pension gap.
Gap 3: Investing confidence
The UK is a nation of nervous investors. Aviva finds that 46% of UK workers believe investing is too risky. This phobia disproportionately impacts women.
The Independent reports that, of those confident in their investment decisions, 57% were men while only 31% were women.
On the subject of getting started, 74% of women said they were too nervous to invest, compared with 58% of men, MoneyWeek reports.
A lack of investing confidence is limiting. You might prefer cash savings to investment growth, reducing your wealth-building potential and leaving you vulnerable to the eroding power of inflation. A knock-on effect might be that it takes longer for you to achieve your retirement goals than it would for a man in a comparable position.
Likewise, you might choose to invest with less risk, meaning that your pension may not grow as much in the long term.
How Kellands can help…
Your financial planner can work with you to break down any psychological barriers that might be preventing you from investing.
This could involve explaining risk in real terms so that you overcome your loss aversion and take advantage of more opportunities to grow your wealth.
Your financial planner can also tailor a bespoke portfolio, diversified to help spread risk across different asset types, locations, and markets. This can help manage investment risk while giving your portfolio opportunities for long-term growth.
Overcome these gaps with your Kellands financial planner
The gaps facing women are problematic, but they can be managed, and even conquered, with the right financial planning strategy.
Learn more about how our award-winning team can help you plan and prepare for your dream retirement without institutional prejudice holding back your progress.
Email us at hale@kelland.co.uk or call 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.
The Financial Conduct Authority does not regulate cashflow planning or 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.
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.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.