More than a third (36%) of women have been found to likely face poverty in retirement, according to research by Scottish Widows.
Its Women and retirement report 2025, which surveyed 4,091 employees, also found that more than half (58%) of female respondents at or near retirement have taken a career break compared to just 12% of men. Women are 12 times more likely to take a break in career in order to raise children, losing income and pension contributions.
By age 55, one in four women has been out of work for more than five years, which could result in a £70,000 hit at retirement.
Women who took a five-year career break at 35 years old could reach age 67 with a pension worth £512,0002, which is £69,380 less than women who do not take a break in their career.
While 61% of female respondents said they manage their money during career breaks, compared to 58% of men, they are less likely to plan for these financially, and 40% did not plan financially at all. More than half (56%) never considered the impact it would have on their retirement, and 42% found the break reduced their ability to save, compared to 37% of men.
According to Scottish Widows, the median total private pension for women at retirement is £173,000, versus £286,000 for men. The gender pension gap between women and men now stands at £113,000, or 32%, up from £100,000, or 30%, last year.
Susan Hope, retirement expert at Scottish Widows, said: “Millions of women in the UK are living with the gender pensions gap and they don’t even know it. To achieve true equality in retirement, we need to make sure career breaks don’t break women’s future financial security.
“Spouses should be actively saving into women’s pensions during any career breaks as third-party contributions. Not only can it maximise tax relief for those who have used up their allowance, it can help to plug gaps in pension contributions while earning power is limited. Employers also continue to play an important role in pension contributions during maternity leave. Fortunately for women, employer contributions in a workplace scheme are often calculated based on their pre-leave salary.”
