The gender pension gap is a financial wellbeing issue - and employers have a role to play
Women’s retirement outcomes are still being shaped by the realities of working life: pay, hours, caring responsibilities and access to pension saving.
The pension gap is not just a retirement issue - it is a lifetime earnings, caring and opportunity issue.
The report finds that women’s pension wealth reaches 54% of men’s pension wealth by their late 50s. In other words, by the point many people are approaching retirement, women have built up just over half the pension wealth of men.
That gap has real consequences. It affects confidence, resilience and the ability to retire with dignity and independence. It also reflects broader inequalities in work, pay and care - meaning employers have a meaningful role to play in helping to reduce it.
Why the gap persists
The report shows that the gap is driven mainly by labour market inequalities rather than pensions alone.
The biggest factor is working patterns. Women are more likely to work part-time, take career breaks and carry unpaid caring responsibilities. The report states that women are “less likely to be in employment than men (75% vs 82%)” and, among those in work, “more likely to be working part-time (33% vs 10%).”
When adjusted for part-time hours, labour market participation falls to 48% for women compared with 73% for men.
The second major factor is pay. The report notes that the gender pay gap stands at 12.8% in 2025, and that women’s annual incomes are equal to around 76% of men’s.
The result is cumulative: lower earnings mean lower contributions, fewer opportunities to save consistently and less pension wealth over time.
The report also highlights the impact of unpaid work. Women carry out 60% more unpaid work than men, and are much more likely to be the primary caregiver. That means the pension gap is not just a savings issue - it is a reflection of how work and care are distributed across society.
Why this matters for financial wellbeing
The report is clear that the gender pension gap does not only affect retirement income. It also affects quality of life, independence and long-term financial security.
This matters for employers focused on financial wellbeing. If employees do not understand how career breaks, reduced hours or low earnings affect their pension, they may not realise the long-term cost until it is too late to change course.
That is why targeted education, guidance and advice matter.
A practical financial wellbeing approach can help women:
- understand how pension saving changes during career breaks,
- recognise the long-term impact of part-time work and low earnings,
- make informed decisions about contribution levels,
- and plan more confidently for retirement.
This support is particularly important at key life stages - returning from maternity leave, moving to part-time work, balancing caring responsibilities, or reviewing finances after separation or divorce.
The most useful takeaway
One of the most powerful lines in the report is this:
“If the Gender Pay Gap was ‘solved’, but differences in working patterns remained, the average woman would achieve a pension of around 61% of that of the average man.”
That is a crucial insight for employers.
It shows that even if pay equality improved, the pension gap would still remain unless working patterns, caring responsibilities and access to pension saving are also addressed. This is why employers need to think beyond pay alone.
What can employers do?
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Make financial wellbeing support more relevant to women
Generic pension communications are not enough. Women often need support that reflects real-life circumstances such as:
- career breaks,
- part-time work,
- multiple jobs,
- lower earnings,
- caring responsibilities,
- and returning to work after time away.
Financial wellbeing support should explain the pension impact of these choices in clear, practical language.
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Improve access to guidance and advice
Employees need to understand not just what a pension is, but what their pension means for their future.
That includes:
- understanding automatic enrolment eligibility,
- reviewing contribution levels,
- using modelling tools,
- checking old pension pots,
- and making informed decisions around retirement planning.
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Support women through life events that affect saving
Career breaks and reduced hours often coincide with major life changes. Employers can help by offering support at the moments that matter most:
- maternity and parental leave,
- return-to-work transitions,
- flexible working decisions,
- carers’ support,
- and relationship changes.
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Review flexibility, progression and pay practices
The report shows that the pension gap is rooted in labour market inequality. That means employers should also look at:
- flexible working access,
- promotion pathways,
- leadership representation,
- pay equity,
- and returner progression.
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Build inclusive support into broader DEI strategy
For employers looking to address these issues more holistically, Marsh’s broader support - including DEI support through our Workforce & Career practice - can help organisations think about how workplace policies, benefits and culture shape women’s career and financial outcomes.
That wider lens matters because the pension gap is not only a pensions issue. It sits at the intersection of reward, talent, flexibility, wellbeing, inclusion and career progression.
Why employers should pay attention now
The report also shows the scale of the issue in another striking statistic: “57% of pensioners in poverty are women.”
That makes the case for action very clear. Supporting women’s financial wellbeing is not only the right thing to do - it is also a way to improve resilience, inclusion, retention and long-term employee experience.
Employers that act now can help employees make better decisions earlier, reduce future financial stress and improve outcomes for women across their careers and into retirement.
How Marsh can help
If you are looking to strengthen your financial wellbeing strategy, now is the time to consider how your support reaches women at different life stages.
A more effective approach will combine:
- inclusive benefits design,
- targeted financial education,
- access to guidance and advice,
- flexible working support,
- and broader DEI-enabled workforce strategies.
To explore how Marsh can help please get in touch.