The gender pension gap: what employers can do to improve retirement outcomes 

By Kelly Parsons, Head of DC Proposition

For many employers, supporting financial wellbeing has become a strategic priority. Yet one of the most persistent financial inequalities affecting employees often receives far less attention than issues such as pay, wellbeing or workplace flexibility. 

The gender pension gap continues to leave many women on track to retire with significantly lower pension savings than men. In many organisations, the gap develops quietly over decades, shaped by career breaks, caring responsibilities and working patterns rather than deliberate financial choices. 

For employers, this is not a question of fault or responsibility. It is, however, an opportunity.  

An opportunity to help employees better understand how life events and career decisions can affect retirement outcomes, and to provide support at the moments that matter most. As with broader pension adequacy and financial wellbeing challenges, the workplace remains one of the most effective environments for improving awareness, engagement and ultimately outcomes. 

In an environment where financial wellbeing is increasingly linked to employee value propositions, workforce planning and retirement readiness, helping employees build stronger financial futures can benefit both individuals and organisations. 

Why the gender pension gap grows throughout an employee’s career 

The gender pension gap does not arise from a single decision or event. Instead, it develops throughout a person’s working life. 

Women are more likely to take career breaks, more likely to work part-time at certain stages and often face competing financial priorities. These factors can lead to lower lifetime earnings, lower pension contributions and, critically, less time for investments to grow. 

The cumulative effect is significant. Women retire with pension savings that are around a third lower than men and are more likely to fall short of even a minimum standard of living in retirement. 

Importantly, these outcomes are typically the result of structural patterns rather than conscious financial decisions. In many cases, employees are simply unaware of the long-term impact until much later. 

“The gender pension gap is rarely the result of a single decision. It builds gradually over the course of a career, which is why improving awareness at key life stages can make such a meaningful difference to long-term retirement outcomes.” 

Kelly Parsons, Head of DC Proposition, Employee Benefits 

How career breaks and caring responsibilities affect pension outcomes 

Career breaks play a central role in shaping retirement outcomes. 

Time out of the workforce, particularly for childcare, can reduce pension contributions at the same time as valuable opportunities for investment growth are lost. Even relatively short breaks can have a noticeable impact, while longer periods can materially reduce retirement savings. 

However, the issue is not simply the break itself. It is also how well employees are supported before, during and after these periods. 

Many employees do not fully understand how pension contributions, employer payments and investment growth may be affected by time away from work. 

This highlights a broader point: key life stages represent moments where engagement can have a disproportionate impact on long-term outcomes. 

Why pension awareness remains a major challenge 

One of the most consistent findings across pension research is that many people are not fully aware of the gender pension gap or what it means for them personally. 

Financial planning during working life is often focused on shorter-term priorities, such as building emergency savings or managing day-to-day costs. While entirely understandable, this can mean retirement planning is pushed further down the agenda. 

Where awareness is low, engagement tends to be low as well. And when outcomes feel distant or difficult to influence, people are less likely to take action. 

This is where employers can make a meaningful difference. Not by increasing complexity, but by improving clarity. 

Improving pension outcomes involves more than contribution levels 

As with wider pension adequacy discussions, contribution levels matter, but they are only part of the picture. 

Investment returns, consistency of saving and timing all play an important role. Small changes made early, or maintained over time, can have a disproportionate impact on retirement outcomes. 

For employees who experience interruptions to their career, the ability to restart contributions, increase saving rates or remain invested appropriately can help narrow the gap. 

The challenge is that these actions require understanding, confidence and, in many cases, a prompt to act.

How employers can help address the gender pension gap 

There is no expectation that employers resolve the gender pension gap. However, they are well placed to support employees in ways that can improve awareness and enable better financial decisions. 

Four areas stand out. 

1. Help employees understand the long-term impact of pension decisions 

Clear, simple communication can help employees understand how pension outcomes are shaped over time. 

This includes explaining: 

• the long-term impact of career breaks 

• how pension contributions and employer payments work during different life stages 

• the importance of remaining invested over the long term 

The aim is not to overwhelm employees with information, but to help them connect today’s decisions with tomorrow’s outcomes. 

2. Use key life events to drive pension engagement 

Engagement is often most effective when it is linked to real-life events. 

Moments such as starting a family, returning from parental leave or changing working patterns provide natural opportunities to share relevant information and guidance. 

At these points, even small nudges can lead to meaningful actions, such as reviewing contribution levels or re-engaging with retirement planning. 

3. Encourage long-term pension saving habits 

Encouraging employees to view pension saving as a long-term habit rather than a one-off decision can improve outcomes over time. 

This might include: 

• reinforcing that minimum contributions are a starting point rather than an end goal 

• highlighting the value of small increases over time 

• signposting tools and guidance that help employees understand their position 

4. Connect pensions to your wider financial wellbeing strategy 

For many employees, pensions form part of a wider financial wellbeing picture. 

Supporting employees to balance short-term financial resilience with long-term retirement planning can help build confidence and encourage more informed decision-making. This can be achieved with the provision of accessible, practical information. 

Steps employees can take to improve retirement outcomes 

While the gender pension gap is shaped by structural factors, there are still actions individuals can take to improve their own outcomes over time. 

These include: 

• understanding the potential impact of career breaks and planning where possible 

• maintaining or restarting contributions as early as practical 

• considering small contribution increases when circumstances allow 

• making full use of employer contributions and available pension benefits 

• seeking guidance when decisions feel unclear 

Importantly, none of these actions need to be immediate or significant. Incremental changes, made consistently, can have a meaningful effect over the long term. 

Closing the gender pension gap starts with awareness 

The gender pension gap is a complex issue, but the response does not need to be. 

For employers, the opportunity lies in improving awareness, making information accessible and supporting engagement at the moments that matter most. For employees, it starts with understanding how decisions made throughout working life can influence retirement outcomes. 

As with many aspects of workplace pensions, the most effective approach is rarely a single solution. Instead, it is a series of small, well-timed actions that build over time. 

The value of the workplace is that it provides a consistent and trusted environment in which those actions can begin. 

Summary 

The gender pension gap develops gradually over the course of a career and is influenced by factors such as career breaks, caring responsibilities, part-time working and lower lifetime earnings. Women are therefore more likely to retire with lower pension savings and income than men. 

By improving pension awareness, communicating at key life stages and supporting long-term saving behaviours, employers can help employees make more informed decisions and improve retirement outcomes over time.