More needs to be done to ensure women are not at a disadvantage compared to men in later life.

Lloyds Banking Group
29 November 2021
4 min read

Imagine reaching retirement age and discovering that, despite years of saving, you don’t have enough money to get by. Worse still, suppose you’re unable to pay for the right kind of care in your old age.

And what if you and your partner separate or your spouse dies unexpectedly – will you have sufficient funds to see you through retirement?

Now, all of these might sound like worst case scenarios but, unfortunately, for women right across the UK one or more of them could become a reality.

Indeed, this year’s Women and Retirement report from Scottish Widows has found that if current work and earning trends continue, women aged 25 years today would need to save a staggering £100,000. Even more worrying; an extra £50,000 may be needed to cover longer life expectancy and a further £35,000 for care costs.

In short, that’s an extra £185,000 women will need to save to reach the same level of retirement income as men – which works out at an extra £210 they will need to save each month over their lifetime.

That’s why Scottish Widows continues to call for change and raise awareness of the gender pensions gap. And as part of our ongoing commitment, each year we release our Women and Retirement report – where we shine a light on recent trends, plus highlight some of the areas where the UK Government can make improvements.


"In short, that’s an extra £185,000 women will need to save to reach the same level of retirement income as men"


Read our report to find out more

Why do women's savings need to stretch further? 

Simply put, structural inequalities in working life continue to result in a major disparity between men and women’s retirement savings.

Some of these structural inequalities include:


Facilitating child care

Women are more likely to work part-time in order to manage maternity and child care responsibilities.1 As a result, they are more likely to earn less than men too. Plus, many women will naturally take time off to start a family – resulting in gaps in their work history.

Given these factors it’s perhaps unsurprising to learn that women earn 35% less than men on average over their lifetime, according to the 2019 ONS Annual Survey of Hours and Earnings. It follows that without major reform to childcare and parental leave, women will simply be unable to save as much as men over the long term.


Vulnerabilities in separation

21% of women surveyed told us they plan to rely at least partly on their partner’s income in retirement. However, this can leave women in a particularly vulnerable situation should they separate from their partner.

You see, right now, it’s rare for divorce settlements to account for pension assets, which means that women could end up in particularly unstable financial situations following divorce.


Rising longevity 

Also, women tend to live longer than men – two to three years, on average. Indeed, this continued rise in longevity means that a 25-year-old man today can expect to live to 86, while a woman can live to 89.

And while rising longevity is of course a good thing, it does raise specific challenges – especially when it comes to funding retirement and old age.

The need for care

For example, together with living longer women are more likely to need care when they’re older. In fact, of the 6 million people in the UK over the age of 60 currently living with a disability, 3.5 million of them are women.

And those women who do need care spend on average a year longer in care homes than men. Right now, the average cost of care is £679 per week, which means women would need an extra £35,000 during retirement for residential care costs.

Moreover, as women can expect to live two to three years longer than men, they would also need around £50,000 for their retirement – bringing the total amount needed to match a man’s retirement income to £185,000.


How longevity is effecting the pensions gap

Thanks to the UK Government’s automatic enrolment scheme - whereby UK employers are legally obliged to set up and contribute to a pension for their qualifying employees – women aged 25 or over right now could end up with a retirement pot of around £250,000.

This is higher than the current £130,000, but lower than the projected £350,000 for men.

On a practical level, this could translate to a monthly private income of around £1,200 for those same women who reach 89. It’s worth noting, however, that these figures are based on the best case scenario – women could be left with much less depending on things such as lower risk investment strategies and inflation.

Men, on the other hand, could get an average monthly income of between £1,600 to £1,900 per month. As we say, though, living on average three years longer than men means that women would need £400,000 - £50k more to reach the same level of retirement income.

"There are many issues facing women in retirement which call for an array of different policy reforms."


Read our report to find out more


Moving forward

As you can see, there are many issues facing women in retirement which call for an array of different policy reforms and the scrapping of outdated and damaging societal conventions. For example, to enable real progress, women must feel as confident as men in taking on senior roles, and having inspiring female role models within organisations is one way to do this.

Aside from raising awareness of the pension pay gap and calling for more reforms from the UK Government, Scottish Widows also offers specific support to women in the form of a dedicated pensions hub – so they feel empowered to take control of their pensions and their financial situation more generally.1

Read our latest Women and Retirement report to find out more about what can be done to ensure women don’t lose out in retirement.

Download the Women and Retirement report



1.  The gender pensions gap 



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