#IWD2022: Profile Pensions’ data shows an average gender pension gap of over 30%

by | Mar 7, 2022

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Money jar with pension written on

Data from Fintech company Profile Pensions shows that women in the UK have almost 30% less in pension savings in their pension pot compared to men – a trend that is seen across all regions of the UK. As International Women’s Day is celebrated, findings still show that there are considerable gaps when it comes to pension savings, with the average man’s pension worth £44,733 and the average woman’s pension only worth £31,004.

From Profile Pensions’ own data, the total amount saved in the sample of their customers’ pensions was collated from 13 regions across the country, with every region from the United Kingdom reporting male customers to have a higher value pension pot. Southern Scotland reported the least amount of disparity between men and women’s pensions, with the average women’s pension variance standing at £5,895, a 15.7% difference than the average man’s pension for the area. The area with the greatest disparity in pension pots was in the East Midlands, where the average man’s pension was worth nearly £20,000 more than the average woman’s, showing a 42.4% percentage difference in pension pot values.

Profile Pensions data Dec 2021 to Feb 2022 based on 13137 customers aged 22-66 with total pension value of surveyed customers equalling £588m

There are multiple factors that can affect the gap, most significantly the impact that becoming a mother has on women’s pensions. By taking time out of work to raise children and not contributing to a pension, parents can miss out on key compound interest, investment growth and additional payments into their investments. As women most often take on the bulk of parenting that results in career breaks, this could cost them up to 10% of the value of their pension.* An additional blow to women having on average smaller pension pots is that they have a longer average life expectancy than men and so will also likely need more in their pension pots to finance their longer retirement.

Though the pensions gap persists, Profile Pensions are committed to helping all people achieve a pension that works for them with the aim of making their customers better off in retirement. With the introduction of their flexible contributions feature, ability to start a new pension and an ongoing investment advice service, customers are supported to contribute to their pension savings when it works for them, and receive advice on investment plans to match their goals.

Profile Pensions Chief Investment Officer Michelle Gribbin stressed the importance of recognising the pensions gap first to be able to address it. “Our data shows that the pension gap continues to exist across the country and so we want to encourage women to save earlier and for longer so that everyone’s pensions perform as best as they can for them. We feel it is important to share the findings of our report to remind savers that the gap continues to exist, but that there are ways for women to be able to improve their pension savings. This better understanding of pension investments will in turn help close the pension gap, which we’re keen to help reduce as much as we can.”

What this data can illustrate is that while the pension gap is a reflection of wider pay inequality in the UK and that steps need to be taken to close this, by having pension providers that offer flexible features that can match people’s real lives and relationship with work and family shows huge promise in accelerating the closure of the pension gap.

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