The gender pension gap looks set to widen, with fewer working age women contributing to DC workplace schemes, when compared to men.
Analysis of the Office of National Statistics’ wealth & assets survey by consultants Broadstone show that 23 per cent of men aged 16 and above are contributing to an occupational DC scheme, compared to just 19 per cent of women. These are contributions above AE minimums, and don’t include contributions to private pensions or DB schemes. As a result the median DC pot size for men is £10,000 compared to just £5,000 for women.
This trend widens for workers in the middle of their career – with only 25 per cent of women aged 35-44 contributing to workplace DC schemes, compared to 33 per cent of men. At this age, men have a median occupational DC pot size of £12,000, almost double that of women — £6,700.
Among those aged 45-54, just 25 per cent of women contribute, compared to 32 per cent of men, leaving them with a median pension wealth of £7,400—less than half of men’s £15,000.
Once this gap in pension savings begins to open, it accelerates rapidly. By age 55-64, towards the end of their career, the proportion of men and women contributing to their DC pot is broadly similar. However, the gap in median pot size has widened significantly with men having nearly three times the median pot (£24,000) as women in this age group (£6,800).
A key driver of this disparity is career breaks for childcare. Research from the Pensions Policy Institute (PPI) highlights differing working patterns as the biggest factor behind the gender pension gap with women more likely to take time off or work part-time where hourly pay is often lower, reducing their pension contributions and damaging career progression to higher-paid roles later in their careers.
The PPI estimates these career patterns alone cut women’s pension wealth by 47 per cent, with the biggest impact occurring in their 30s – when many step back from work to care for children or family – as reflected in the Wealth & Assets Survey data.
Broadstone workplace engagement consultant Rachel Coles says: “Our analysis highlights a stark gender difference in participation to active occupational DC pensions between men and women, driving a widening gap in total savings.
“The findings reflect a well-documented trend of women, on average, entering retirement with less wealth with factors such as childbirth and menopause forcing many out of the labour market or into part-time work and inhibiting future career progression.
“Employers can play an important role by offering greater flexibility around pension contributions during career breaks, for example, while policymakers should explore solutions such as enhanced parental leave policies and better support for returners to the workforce.
“It’s also vital that women have access to tailored financial advice and planning tools to navigate career gaps and understand the importance of early saving in improving retirement outcomes. Employers can support this by offering financial education that helps female employees plan for any career breaks and take proactive steps to close any savings gaps.”
