8th March 2025 marks International Women’s Day (IWD), a global awareness day highlighting the social, economic, cultural and political achievements of women with the aim of celebrating the progress of gender equality and raising awareness where inequalities still exist. This year, the theme of IWD is Accelerate Action, looking at ways to close the gap globally between men and women.
The UK is ranked 15th on the global gender gap index, behind other European countries such as France, Germany, and Ireland (1). Despite improvements, the gender pay gap still exists, standing at 7% in April 2024. The gender pay gap is largest for employees aged 40 years old and over, with the wage gap widening amongst the older demographic (2).
This presents a particularly concerning situation for women approaching retirement and contributes to the much larger gender pension gap in the UK. Legal & General estimates that the average UK pension pot for men and women over 50 holds ~£84,000 for men and ~£40,000 for women, representing a gap of more than 50% (3).
The reasons for this gap in savings vary and include women being less likely to be in senior leadership positions, more likely to take career breaks for childcare or unpaid care work and more likely to work part time or reduced hours. The report also found that women over 50 years old report being less confident handling finances compared to their male peers (3).
How can you push back against the gender pension gap?
Acting now is key to closing the gap. An excellent way is to assess your current finances, including your income, outgoings, savings you already have in place and any debt. You can use our Money Management service on the My Money matters platform, which will give you a full overview of your bank accounts and allow you to track spending, cut bills, control your finances and find smart ways to start saving money.
If you’re close to retirement, you may want to use the Legal and General Retirement Income Calculator to see how much money you could have when you reach retirement and figure out if you would like to save more.
If you would like to save more and are able to, as a Local Government Pension Scheme (LGPS) member you can use your exclusive access to the Shared Cost Additional Voluntary Contribution (Shared Cost AVC) scheme. Thanks to immediate Income Tax and National Insurance contribution savings, a £100 contribution only costs a basic rate taxpayer £72.08.*
You can learn more about this offer by attending our webinar, ‘Closing the Gender Pension Gap’, or visit our Shared Cost AVC page.
*Basic rate savings are displayed as a guide only. Basic rate assumes an individual paying 20% Income Tax and 8% National Insurance contributions. The actual savings will depend on your personal circumstances and investment fund performance, which is invested by your Shared Cost AVC provider
Shared Cost AVCs are available to active LGPS members only. You should consider your affordability before making or amending your Shared Cost AVC plan. Please speak to an independent financial adviser if you require financial advice. You will need to consider what investment product is suitable for you.
A Shared Cost AVC cannot be accessed until age 55, rising to age 57 from 2028.
A Pension is a long-term investment, the fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.
Tax treatment is based on individual circumstances and may be subject to change in the future.
Sources:
Statista, June 2024, “The Global Gender Gap Index”, Gender gap index 2024 | Statista
Office for National Statistics, Nov. 2024, “Gender pay gap in the UK: 2024”, Gender pay gap in the UK - Office for National Statistics
Legal and General, Jan. 2025, “Gender Pension Gap”, Gender Pension Gap | Legal & General
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