Gender pension gap

About the gender pension gap

The gender pension gap is the difference in retirement income or wealth between women and men.  

The relationship between pay and pension gaps

The gender pay gap is a longer-standing concept than the pension gap. The Office for National Statistics, which compares average hourly earnings of men and women in all jobs in the UK, found the 2025 pay gap was 12.8%.

Retirement incomes can reflect pay. In defined benefit schemes like the LGPS and NHSPS, whole-time equivalent pensionable pay is a variable in the calculation of pension benefits. In defined contribution savings arrangements, a proportion of pay is added to the pot. It might be expected that the gender pension gap would show a similar figure to the gender pay gap, but it is much higher at around 35%.

Why is pay inequality amplified in pensions?

Differences between women and men in employment participation play a part in creating inequality in retirement. In defined benefit schemes, employment breaks and part-time working reduce pension entitlement. In defined contribution schemes, not contributing to a savings pot when young has a disproportionate effect on likely investment returns. Women who are out of paid employment in their 30s miss out on important ‘savings years’.  

Differences in how much women and men pay in to a pension scheme also play a part. Different contribution rates might result from women sacrificing their pension when household finances are tight, or from higher paid men having the ability to save disproportionately more.  

How can workplace schemes become more equal?

Defined benefit (DB) schemes: UNISON is pressing for better pension accrual during periods of maternity leave in the LGPS and NHSPS.

Defined contribution (DC) schemes: UNISON believes changes could be made to help low-paid workers (who are disproportionately women) to build up pension entitlement through unconditional and higher employer contributions.  

How defined benefit schemes narrow inequality

There are large gender pension gaps in the public service pension schemes that UNISON is working to address. Yet, at an economy-wide level, these schemes help reduce the gender pension gap because women are more likely than men to be employed in the public sector and to have access to a good quality defined benefit pension. The continued availability of public service pension schemes helps defend against greater inequality in retirement.  

State pension and gender inequality 

The gender pension gap for the state pension is below 5% and closing, but it is not projected to reach zero until 2041. The state pension has proved to be the part of the system most amenable to reforms that promote gender equality and recognise participation outside paid work. For a qualifying year to be achieved, pay must only be above the ‘lower earnings limit’ but this must be reached in one job. A qualifying year can also be achieved through being in receipt of child benefits for a child under 12.  

A carer credit has been proposed which would be paid in addition to the value of the state pension. A qualifying year achieved through unpaid care work should result in an additional sum being paid in retirement, to reflect the loss of opportunity to build workplace pension entitlement (with the accompanying tax relief) during this time. UNISON is keen on promoting this idea as a way that the state pension can go further in addressing the overall gender pension gap.  

How can we tackle the gender pension gap?

• Defend defined benefit pensions in the public sector.
• Improve workplace schemes through better pension accrual during maternity leave and higher and unconditional employer contributions into Defined Contribution savings pots.  
• Better recognise the role of unpaid care work through a supplement to the state pension.