The Gender Pension Gap: What Every Woman Needs to Know

AND WHAT YOU CAN DO ABOUT IT, STARTING TODAY.

Let's start with a number that tends to stop women in their tracks: on average, women in the UK retire with 35% less pension wealth than men (Royal London). That's not a rounding error. That's a structural gap that has been quietly building across decades of career breaks, part-time work, pay gaps, and, if we're honest, a financial services industry that has historically done a poor job of speaking to women.

At Versed, we see the consequences of this gap every day. We also see, time and again, that with the right advice at the right moment, it may be possible to reduce it, or improve your overall retirement position.

Why does the pension gap exist?

The gender pension gap isn't one problem. It's several, stacked on top of each other.

·         Career breaks for childcare or caring responsibilities reduce the years you're paying into a pension.

·         Part-time work, still disproportionately done by women, means lower contributions and lower employer matching.

·         The gender pay gap means women's salaries (and therefore pension contributions) are often lower throughout their careers.

·         Women live longer on average, meaning their pension pot needs to stretch further.

·         Self-employment, which is increasingly common among women, often comes with no default pension scheme at all.

The result is that many women arrive at retirement with a pot that simply doesn't reflect the life they've built.

When is the right time to address this?

The honest answer is: earlier than you think, but never too late. We work with women at every stage, from those in their thirties who want to build a solid foundation, to women in their fifties who are reassessing what retirement actually looks like for them.

What we've found is that even small adjustments such as increasing contributions by a few percentage points, consolidating old workplace pensions and reviewing where your money is invested, can make a significant difference over time. The power of compounding means that action taken today is always worth more than the same action taken in five years.

What independent pension advice actually looks like

There's a lot of noise around pensions; pension providers, comparison sites, and online calculators that spit out numbers without context. What independent advice gives you is something different: a clear picture of where you stand today, where you want to be, and the specific steps to get there.

When we work with a client on their pension, we look at:

·         All existing pension pots; workplace, private and any old schemes that may have been forgotten

·         Where those pensions are invested and whether the strategy still makes sense

·         Your target retirement income and the gap between that and your current trajectory

·         Tax-efficient ways to increase contributions, including salary sacrifice or director contributions for self-employed

·         Whether consolidating pensions would improve your position

·         How your pension fits into your broader financial plan; property, investments and protection

A note for self-employed women

If you run your own business, the pension gap can be even more pronounced. Without an employer automatically enrolling you and contributing on your behalf, it's easy for pension planning to slip down the priority list, especially in the early years when cash flow is king.

But the tax benefits of pension contributions are significant, particularly for higher-rate taxpayers and company directors. A well-structured pension can be one of the most tax-efficient ways to extract profits from your business. This is an area where independent advice can be particularly valuable for some individuals.

The bottom line

The gender pension gap is real, but it is not inevitable. With clear information, a solid plan, and the right advice, you can build a retirement that reflects the ambition and effort you've put into your career and your life.

If you've been putting off thinking about your pension whether because it feels complicated, because you're busy, or because you're not sure where to start, we'd love to change that. We offer a complimentary consultation to any woman who'd like to understand where she stands. No jargon, no pressure, just a straightforward conversation.

This article is for general information only and does not constitute personal financial advice. The value of investments can go down as well as up, and you may not get back the amount originally invested. Tax treatment depends on individual circumstances and may change in the future.