British women face a more than £47,500 pension savings shortfall compared to their male counterparts, according to new research.
A study conducted by Legal & General found women risk running out of pension funds 14 years before the end of their lives, new research has revealed. This is in stark contrast with men in the UK, who face just a two-year shortfall.
Legal & General’s findings, released ahead of International Women’s Day on March 8, shows women could empty their private pension savings by age 73.
With the average 60-year-old woman expected to live until 87, many face over a decade without private pension income.
Men, by comparison, could see their pension pots run dry by age 83, according to the Legal & General research.
With the average 60-year-old man in the UK expected to live until 85, this leaves just a two-year gap without private pension savings.
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Research from Legal & General is exposing the pension crisis women are facing
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The modelling used Office for National Statistics (ONS) life expectancy calculations alongside an Opinium survey of 3,000 people aged over 50 conducted in December 2024.
These calculations made assumptions about inflation and investment returns, with regular withdrawals starting at age 67.
The research revealed women typically have less saved in their pensions than men – just £40,000 compared to £87,500.
Despite this significant gap, women withdraw less monthly from their pensions than men. Female retirees receive an average of £625 per month from income drawdown pensions.
Men, meanwhile, receive £875 monthly on average. This combination of smaller pension pots and longer life expectancy creates a particularly challenging situation for women in retirement.
Katharine Photiou, the managing director of workplace savings at L&G, warned that pension withdrawals can create a “lottery effect” after decades of saving.
“What seems like financial freedom now might turn into uncertainty later,” she cautioned.
The research also found women were more likely than men to have increased their withdrawal rate since they first started making withdrawals.
More than a quarter (27 per cent) of women had increased their withdrawal rate, compared with less than a fifth (19 per cent) of men.
The calculations assumed people had no other sources of income, such as property wealth or guaranteed pension income based on salary.
People will still be entitled to the state pension, which depends on factors like National Insurance contributions. Separate research from Moneybox found nearly one in 10 women plan to start investing this year.
Investing more was the top financial goal among women aged 25 to 34. More than half (59 per cent) of women who invested last year did so to grow wealth, while 47 per cent wanted to secure a comfortable retirement.
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Women appear to be at a pension savings shortfall compared to men
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Lower, part-time salaries and caring responsibilities create significant obstacles for women saving for retirement. Life events that disproportionately affect women can severely impact pension savings.
These include motherhood, divorce, caring responsibilities, and menopause. The impact extends beyond just the pension gap itself.
Another study from Intuit Credit Karma found that over half (59 per cent) of parents have taken on new debt to afford maternity or shared parental leave.
Parents borrowed an average of £2,658, with a quarter still in debt when their child started school.
Catherine Foot, director of Phoenix Insights, said addressing the gender pension gap requires supporting women “at every stage of their working lives”.
She urged employers to “go above and beyond the minimum levels of support”.
“This should include integrating greater workplace flexibility around caring commitments or a significant life event and expanding the accessibility of workplace pension saving,” she added.