Over a third of women are at risk of pension poverty, according to the Scottish Widows Women and Retirement Report. The report revealed a significant disparity in pension wellness between men and women, as well as a difference in retirement funds between women who have taken a break from work and those who have not. Additionally, the research, conducted by the organisation every year, found that more than half (58%) of women at or near retirement have taken a career break, compared to just 12% of men.
It also found that women are 12 times more likely to take a break in their careers to raise children (36% vs. 3%), which leads to a loss of income and gaps in their pension contributions. One in four (24%) women have been out of work for more than five years by the age of 55, which can result in an average pension loss of £70,000. Overall, the report calculated the median total private pension for women at retirement is £173,000, compared to £286,000 for men, marking a significant average difference of £113,000, which is up from last year’s £100,000.
Scottish Widows’ 2025 study found that women tend to manage their money better than men while taking a career break. However, the research also found that two-fifths (40%) of women didn’t plan financially for their career break, and over half (56%) did not consider the impact it would have on their retirement.
The primary motivation for this is taking career breaks to care for children. Women are 12 times more likely than men to take a career break when they have children, according to the study.
Scottish Widows says that millions of women have a pension gap and are unaware of it. “To achieve true equality in retirement, we need to make sure career breaks don’t break women’s future financial security,” said Susan Hope, Retirement Expert at Scottish Widows.
“There are a couple of straightforward ways to help address these gender pension concerns. We need to improve awareness and take-up of shared parental leave policies. This policy is critical, yet four in five (80%) women who had children in the last 10 years didn’t take advantage of it.
“This represents around 2.7 million working mothers, and 8% revealed that their spouse’s workplace was not supportive.”
She added: “Separately, spouses should be actively saving into women’s pensions during any career breaks, if possible. This is also known as third-party contributions and, while often overlooked, is a helpful financial planning tool. Not only can it maximise tax relief for those who have used up their allowance, this 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.”