The State Pension Gender Gap Is Nearly Gone - But Women Are Stil
August 14th, 2025
For decades, the UK’s pension system has reflected and reinforced the inequalities women face throughout their working lives. Lower average pay, fewer years in the workforce due to caring responsibilities, and the prevalence of part-time work have meant that women have traditionally retired with significantly less income than men.
Pensions are more than just a financial product - they are a mirror, reflecting how a society values its citizens over the course of a lifetime. For too long, that reflection told women that their contributions, especially in the form of unpaid care, simply were not worth as much.
The latest figures from the Department for Work and Pensions (DWP) mark a notable shift in that story. For the first time, women reaching State Pension age today are receiving almost the same as men - just £1.80 less per week, a difference of under 1%. This is the smallest gap on record, and a remarkable improvement from a decade ago, when the disparity was far greater.
This is a milestone worth recognising. Yet the celebration must be tempered by a more sobering reality: while the State Pension gender gap may be closing, the overall pension gap remains large, driven primarily by inequalities in private pensions.
By the Numbers: The Gender Pension Gap:
State Pension (new retirees): Women – £208.15 per week and Men – £209.95 per week Gap – less than 1%
Private Pension (age 55–59): Women – £81,000 on average and Men – £156,000 on average Gap – 48%
How Policy Closed the State Pension Gap: The progress on the State Pension can largely be traced back to the 2016 reforms. These replaced the complex two-tier system with a flat-rate payment and introduced improved recognition for unpaid caring responsibilities through National Insurance (NI) credits.
For many women, particularly those who took time out of paid work to raise children or care for relatives, these changes were transformative. Under the old system, career breaks could severely limit the State Pension entitlement. Under the new rules, these years of unpaid work now count toward the qualifying years needed for a full pension.
This was not simply a technical fix. It was an acknowledgment of a reality that had long been ignored: that unpaid care is work, and it is essential. By reflecting that value in the pension system, the government corrected one aspect of the structural inequality women have faced for generations.
The Private Pension Problem: While the State Pension reforms represent progress, private pensions tell a very different story. These pensions often make up the majority of retirement income for middle- and higher-income earners, and here the gender gap is far from closing.
Women aged 55 to 59 today have, on average, 48% less in private pension savings than men of the same age - £81,000 compared with £156,000. This gap has widened in recent years, and the causes are deeply rooted in the way the labour market operates.
Key factors include:
Career breaks: Time spent out of paid work to care for children or family members reduces pension contributions and interrupts the compounding of investment returns.
Part-time work: Chosen by many women to balance work and family responsibilities, part-time roles generally pay less, offer fewer progression opportunities, and often come with reduced employer pension contributions.
The gender pay gap: Lower earnings throughout a career inevitably translate into lower pension savings.
The shift from Defined Benefit (DB) to Defined Contribution (DC) schemes: DC pensions are directly tied to contributions, and the risk is borne by the individual. Lower earnings therefore lock in lower retirement savings.
These factors compound over decades, creating a significant gap by the time women approach retirement age.
Two Tiers of Equality: If no further action is taken, the UK risks creating a two-tier system. In the first tier, the State Pension will be an area of near equality, a rare success story in the fight for gender parity. In the second tier, private pensions will remain a space of entrenched inequality, leaving women at a disadvantage long after their working lives have ended.
This has serious consequences. While the State Pension is a vital safety net, it is not designed to provide the level of income many people need to maintain their standard of living in retirement. For those relying heavily on private pensions, the existing gap means that women will continue to face a higher risk of financial insecurity in later life.
Why This Is a Women’s Rights Issue: Retirement inequality is not only an economic challenge; it is a question of justice, dignity, and autonomy. When women retire with less, it is not because they have worked less. They have often worked just as hard - but differently. Many have combined paid employment with unpaid roles as carers, community leaders, and volunteers. These roles are essential to the functioning of society, yet they are rarely valued in economic terms.
The pension gap is, in effect, the cumulative result of a lifetime of systemic undervaluation. Every missed promotion, every year of part-time work, and every period spent out of the workforce for caring responsibilities leaves a lasting mark, and that mark becomes most visible at the point of retirement. Addressing the pension gap is therefore not just about numbers in a bank account; it is about recognising and valuing the totality of women’s contributions, both in and outside the formal economy.
Closing the Remaining Gap: The near-elimination of the State Pension gender gap is proof that meaningful change is possible. The same determination now needs to be applied to private pensions and the structural issues that feed into them.
Four areas deserve urgent attention:
Fairer Private Pension Rules: Employers should be required to make proportionate pension contributions for part-time staff, and pension “top-ups” should be provided during periods of parental leave to prevent long-term erosion of savings.
Closing the Gender Pay Gap Early: Pay inequality compounds over time. Closing the pay gap at the start of women’s careers would have a significant effect on pension equality decades later.
Redesigning Work for Caregivers:Career progression should not be dependent on uninterrupted service. Structures that allow for breaks, without permanently reducing future earnings potential.
Financial Education and Empowerment: Women should have access to resources and training that help them understand pensions, investments, and the impact of career choices on retirement income from the outset of their working lives.
The closing of the State Pension gender gap is an achievement worth recognising, but it is also a reminder of what is still left to do. True equality in retirement will only be achieved when women’s total contributions, both paid and unpaid, are fully valued across all parts of the pension system.
We cannot allow the progress made in the State Pension to mask the reality that many women are still on course to retire with significantly less than men. The gap in private pensions remains wide, and until it is addressed, equality in retirement will remain incomplete.
Policymakers, employers, and society as a whole have a role to play in closing this divide. Equality should not end when your working life does, it should follow you into retirement, ensuring that every individual, regardless of gender, has the financial security and dignity they deserve.