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Gender can often result in a big difference to your projected retirement pot. There’s a pension gap evident where women could be up to £164,000 worse off in retirement than men¹. Let’s put pensions on the agenda and close the pension gap.

As a nation, we’re in danger of not saving enough for our retirements. But that’s only half the story. Women are at risk of significantly less comfortable retirements than men. We want to raise awareness of this issue and provide some practical tips.

According to research commissioned by us², the average man invests £197.15 a month into a retirement fund. Women on the other hand invest an average of £125.04 a month. Over time, this difference has a big impact. If you assume an average investment growth of 5% a year over the course of an 18-65 year working life, a man who puts in £197.15 a month would have a pension pot of £448,263 at retirement³. A woman putting in £125.04 a month would end up with a projected pot value of £284,305. That’s a staggering two-thirds of what the man would have.

In other words, there is a pension gap of 37% between what the average man and the average woman can expect to have at retirement.

What causes the pension gap? First, the obvious

Sadly, there’s a wage gap in the UK with average earnings of men and women in full or part time work differing by 17.9% in 2018, according to the Office for National Statistics⁴. But the pensions gap is bigger than that.

Earning less on average often leads to a proportionally lower level of contributions into a pension fund. Your mortgage payments and outgoings don’t vary dependent on your gender, do they? Once your fixed costs and regular expenditures are settled, if you’re generally earning less, then there might be less scope in your monthly budget to make contributions. Could that be it?

The sandwich generation, a possible cause of the pension gap

Many women, and men of course, have other commitments outside of work to juggle and balance, such as raising children or caring for others, such as elderly relatives. This can affect someone in two ways. It might mean having a career break following maternity leave, or time out of paid work, or perhaps opting for part-time paid work to fit with other commitments. The result is potentially less earnings available, and at a level that feels affordable, to invest in a pension.

Taking a break from pension contributions, especially earlier in life in your twenties and thirties for example, can make a big difference to the ultimate value of your pension. This period is called the accumulation stage of your pension. Missing years during this stage could partly explain the pension gap too.

Would you like some guidance on your finances? As well as providing regulated financial advice, we now offer a low-cost planning service that could help you make better-informed investment decisions.

There’s so much more at play, though

Women may be less engaged in their financial life, perhaps due to a number of reasons including being more time-poor then their male counterparts. Studies show that still in the 21st century, women have more non-paid work commitments and a greater share of running the house than their male counterparts⁵. Perhaps they are forced to view their personal finances as less of a priority when balancing their time constraints with other commitments, and therefore have less to time to spend thinking about investing?

A Financial Times report suggests that women are less engaged with their financial life generally. Could this be due to time constraints, or perhaps information overload and not knowing who to turn to and trust? In the same study, a high proportion of women who had sought financial advice said they felt they had been misunderstood too.

Do women invest differently to men?

Clearly there are hurdles, but when I look at my female peer group (we’re in our thirties), I see a mix of mums returning to work, those who have chosen not to have children, those in the prime of their career, and those who are setting up their own businesses. In fact, most of my female friends are financially successful and the breadwinners in their households. If they’re not, then they’re supporting their partners’ careers and raising children. What else might explain the pension gap?

Many studies show that women are generally more risk averse when it comes to investing and may opt for a more conservative approach. This is evident in the higher likelihood of choosing a cash ISA with a fixed return rather than choosing a stocks and shares ISA, for example. A stocks and shares ISA offers the potential for investment returns far greater than the interest on a cash ISA, but also comes with investment risk because the value of your investment could go down as well as up.

If they do opt for an investment product such as a stocks and shares ISA, women are likely to be less aggressive in their approach to risk than men, according to research of our own customer base.

But is this a bad thing? Casey Lord, head of product at Nutmeg, has explored the idea that women may have an advantage when it comes to investing. One example is that women tend to have a stronger patience discipline. That’s something to celebrate. Women are also more likely to set their approach and stick to it, rather than tinkering with their strategy.

The solution to the pension gap? Take control of your retirement

Here are some practical steps to take control of your financial future and help close the pension gap.

Take stock of what you’ve got

Spend a little time gathering your pension details so you can see what you’ve built up so far. It might take a couple of hours looking for online statements, but the greater clarity you get might be well worth the time. You’re likely to have your state pension entitlement and can check that here.

You may also have built up a number of pension pots with different providers over the years. Work out what you’ve got where and get visibility on these valuable assets.

Depending on the type of pension scheme, you may have flexibility in being able to transfer from one provider to another. First up, check you‘re happy about where your pension pots are currently, and do your research. Knowledge is power. Feel confident in knowing how your pensions are being invested on your behalf and what you are paying those managers in fees. Your provider can supply you with the fee details and an up-to-date valuation. With this information you can decide whether to shop around and consider consolidating your pension pots.

Use a company pension scheme, if you have one

If you’re out of work for a period, staying opted into your company pension scheme is a great start. When you’re in work, paying as much into your pension as you can comfortably afford will serve you well in later life. The government offers tax relief on pension contributions, which means you’re getting free money on the money you put in your pot. Many employers will add their own contributions on top of what is required by auto-enrolment.

The sooner you start, the better your chances of a good financial position when you decide to stop work. Who knows, maybe you could even knock a year or two off the date you can retire?

You could consider a personal pension

Aside from your work scheme, you can set up a personal pension like the one we manage here at Nutmeg. It can be easy to transfer in an old unloved pension scheme and we have a dedicated support team at Nutmeg to answer any questions you might have. We recently began offering fixed allocation portfolios for pensions, meaning Nutmeg customers can choose from all three of our investment styles for their retirement pots. It was important to us to give customers all the tools they need to help achieve their financial goals.

If you have cash savings or inheritance, you may want to consider using these funds to contribute to a stocks & shares ISA. If you’re running your own business you could consider a personal pension too, to make tax-efficient contributions.

Seek advice to make your financial plan

There’s heaps of free and useful information available online from trusted and impartial sources on retirement and personal finances. The Money Advice service and the Pensions Advisory service are two examples.

You can also use Nutmeg’s financial planning tool to plot how your finances may change over time. These kinds of tools can give you an idea of what you might want to invest.

If you would value a professional review of where you’re at now and where you want to be in the future financially, a financial adviser or our planning service may be able to help. Here at Nutmeg we’ve set up financial goals-based and life event tailored services from £275 including VAT. It could be a small price to pay for the power you get with good information and sensible pension planning. The initial call to get to know more about what you need and are looking for is free.

Why not take that time and see if we can help.

The views and opinions expressed herein are for informational purposes only and do not take into account the specific investment objectives, financial situation or individual needs of any particular person. This article is not financial advice; it is intended to help inform your research.


  1. Nutmeg calculations based on average pension contribution figures.
  2. Populus conducted an online sample of 2,076 GB/UK adults between 2-4 July 2019. Data is weighted to be representative of the population of Great Britain. Targets for quotas and weights are taken from the National Readership Survey, a random probability F2F survey conducted annually with 34,000 adults. Populus is a founder member of the British Polling Council and abides by it rules. Click here for further information.
  3. These figures do not take into account the effect of investment costs such as management fees or trading fees, which would lower the final amount.
  4. The gender pay gap is calculated as the difference between average hourly earnings (excluding overtime) of men and women as a proportion of average hourly earnings (excluding overtime) of men’s earnings. The pay gap of 17.9% among full and part-time employees falls to 6% among full-time employees only, which reflects the fact that women are more likely than men to work part-time jobs, which are lower paid. Read the full release.
  5. “Women shoulder the responsibility of ‘unpaid work'”, report by the Office for National Statistics.

Risk warning

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Forecasts are not a reliable indicator of future performance. As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. A pension may not be right for everyone and tax rules may change in the future. If you are unsure if a pension is right for you, please seek financial advice.