The persistent financial inequality facing women in retirement has worsened, with the gender pension gap widening to 32% this year. The finding comes from the 21st annual Women and Retirement report by pension provider Scottish Widows.
The Digital Generation's Advantage
Jill Henderson, a pensions expert at Scottish Widows, highlights a potential source of change: a new, digitally-fluent generation. She contrasts her own early financial experience of a ceramic piggy bank with her 16-year-old daughter, who manages everything via apps in real time.
"My 16-year-old does everything in app, in real time, and can already budget in a way I failed to do with my first credit card," Henderson notes. Data suggests young women are showing an appetite for digital-first guidance. With fewer assets, they may not need formal financial advice but are ready to take control if given the right tools.
Why the Gap Persists
The challenges are deeply rooted. Women often balance careers with family, leading to career breaks and paused pension contributions. Half of all women will take a career break, compared to just one in five men. These life moments have a profound impact.
"Just 24% of women are on track for a comfortable retirement, compared to 36% of men," the report states. Henderson admits the impact on her own savings was something she couldn't measure at the time. She argues achieving pension parity requires broader societal work, not just women's anger.
Budget Changes on the Horizon
The recent Budget left the way people access pensions untouched, which was welcomed. However, significant changes were announced for those boosting pots via salary exchange. From 2029, National Insurance relief on contributions will be capped at £2,000.
Employers have been given time to adapt. The positive note is that tax relief on contributions remains unchanged, and there is still time to maximise the current perk before the cap takes effect.
While automatic enrolment has driven progress over two decades, the growing gap shows more practical support is crucial. Henderson concludes by championing financial autonomy, quoting Clare Boothe Luce: "A woman’s best protection is a little money of her own."
