Spotlight: The Gender Pensions Gap

On average, women retire with half the pension of a man (source: ‘Mind the Gap: Reducing the gender pension gap’ paper published June 2024 by the Pensions Equity Group). That's a big gap! This discrepancy highlights several issues in gender inequality related to savings and retirement.
What is the pensions gap and what are the impacts?

  • Differences in appetite for saving for retirement – According to the Office of National Statistics, more women participate in pension plans than men, whether working full-time or part-time. This indicates a strong engagement with retirement planning among women.

  • Differences in amount saved for retirement – Despite higher participation rates, women still retire with significantly less pension wealth on average than men. This is due to differences in wages, career interruptions, and part-time work preferences. In 2021, the annual savings gap between women and men was £500 per year in the private sector and over £2,000 per year in the public sector (source: Workplace pension participation and savings trends of eligible employees: 2009 to 2021 - GOV.UK). Due to the effect of compounding returns, this considerable gap in annual savings compounds over a lifetime, significantly affecting women's retirement security.

  • The impact on living standards at retirement – The Pension and Lifetime Savings Association (PLSA) sets out Retirement Living Standards to define the income needed for different standards of living in retirement. Women, due to lower savings, are less likely than men to achieve even the ‘Minimum Standard of Living’ as defined by the PLSA. This standard includes basic necessities and modest leisure activities.

  • Risk of poverty in retirement – The savings gap increases the likelihood that women will suffer from poverty in retirement. Insufficient savings mean that many women may struggle more to cover essential expenses, leading to financial insecurity in their later years.

What is causing the pension savings gap?

  • Differences in wages - Women on average earn less than men, a factor that directly impacts their ability to save. The gender pay gap means that, over their working lives, women accumulate less wealth.

  • Career breaks - Women are more likely to take breaks from their careers for caregiving responsibilities, which affects their overall earnings and pension contributions. These career interruptions reduce the compounding growth of their retirement savings.

  • Part-time work - A higher proportion of women work part-time compared to men. Part-time positions often come with lower pay and reduced benefits, including lower pension contributions.

  • Understanding and confidence in managing money - Studies suggest that women on average may have lower confidence in financial decision-making, which can impact their investment choices and savings rates. Helping to educate women on their finances can help address this issue.

What can be done to bridge the gender pension gap?

  • Equal pay and employment opportunities – Ensuring equal pay for equal work and having an equal number of women in higher-paying positions can help bridge the savings gap.

  • Flexible working policies – Implementing flexible working arrangements can support both women and men in balancing work and caregiving responsibilities without sacrificing career progression or pension contributions.

  • Enhanced pension contributions – Pay the equivalent of full-time employer pension contributions for part-time employees, reflecting that part-time working is usually required for caring responsibilities.

  • Financial education – Increasing financial literacy among women can empower them to make better-informed decisions about savings and investments, leading to improved retirement outcomes.

  • Policy Interventions – Government policies aimed at supporting caregivers, such as pension credits for time spent out of the workforce, could help mitigate the long-term impact on retirement savings.

The difference in pension savings between men and women is quite stark. Effectively addressing this gap could involve government policy changes, employer initiatives, and efforts to promote financial literacy and equality in the workplace.


Source: Department for Work and Pensions (DWP) – data published 5 June 2023

The Noise​

  • Nvidia, the US-based chipmaker that has been powered by enthusiasm around AI briefly became the world’s most valuable company this week. The company’s shares have risen over 170% so far this year, putting its market value at a staggering $3.3 trillion and catapulting it over those of Apple and Microsoft. This marks the first time since 2013 that a company outside Apple and Microsoft have held the title for world’s most valuable publicly traded company. Having been valued at a measly $360 billion at the start of 2023, Nvidia is now worth more than the respective stock markets of the UK, Germany, and France. The ranking is yet another reminder that AI is the top focus for many investors. Nvidia is seen as the biggest and earliest beneficiary of the technology, dominating the market with its highly coveted chips that help power data centres running complex computing tasks required by AI applications.

  • UK inflation rose 2% in May from a year ago, down from a 2.3% rise in the 12 months to April per the Office for National Statistics. With inflation having peaked at 11.1% in October 2022, UK inflation has finally returned to its 2% target for the first time in almost three years. The return to 2% was led by a slowdown in the rise of the cost of food, as well as price growth easing for restaurants and hotels. The cost of housing and utilities continued to decline, as did the cost of furniture, household equipment and maintenance. Services inflation, a preferred measure of medium-term inflation by the BoE was 5.7%, down from 5.9% in April, but above consensus expectations of 5.5%. Following the data release, UK stock markets were up on Tuesday, while Sterling appreciated against the Dollar and Euro.

  • The summer solstice falls this week, and a report by thinktank Ember showed that the world has enough solar power capacity to generate a fifth of its midday electricity needs on the longest day of the year in the northern hemisphere. This is up from 16% last year, as investment continues into renewable energy capacity. Per Ember’s report, Solar power is currently the fastest growing source of electricity, as technology costs continue to fall. It is currently forecasted to be the world’s biggest source of electricity before 2050, with falling battery costs helping to expand the energy’s usefulness. With approximately 89% of the world’s solar panels located in the northern hemisphere, solar energy production peaks during its summer months.

The Numbers

GBP Performance to 20/06/2024

Equity GBP Total Return

1 Week








MSCI Europe






MSCI Japan



MSCI Asia Pacific ex Japan



MSCI Emerging Market






Fixed Income GBP Total Return


UK Government



Global Aggregate GBP Hedged



Global Treasury GBP Hedged



Global IG GBP Hedged



Global High Yield GBP Hedged



Currency moves












Commodities GBP return









Source: Bloomberg, data as at 20/06/2024

The Nuance

The Bank of England kept its main interest unchanged at a 16-year high of 5.25% this week, in line with expectations as the 4th of July UK election approaches. The BoE’s Monetary Policy Committee voted 7-2 to hold rates, with seven voting to keep rates steady and two voting to reduce rates. Critically, some policymakers said that their decision not to cut rates was now “finely balanced”.

With latest inflation data released the day prior, Bank of England Governor Andrew Bailey stated that while it was "good news" that the data indicated inflation had returned to its 2% target, it was still too early to cut rates. He emphasised the importance of keeping rates at 5.25% for now to ensure that inflation will stay low.

The BoE vote comes after the European Central Bank's widely anticipated decision earlier this month to begin cutting rates, while financial markets expect the U.S. Federal Reserve to hold off on rate cuts until late this year. Following the meeting, traders increased their bets on a Bank of England rate cut in August, which helped support a pre-election rally in UK stocks and government bonds. Markets placed a 44% probability on a move in August, up from around 32% a day earlier. They priced in a 90% chance of a September cut.


All investment views are presented for information only and are not a personal recommendation to buy or sell. Past performance is not a reliable indicator of future returns, investing involves risk and the value of investments, and the income from them, may fall as well as rise and are not guaranteed. Investors may not get back the original amount invested.

Any views expressed are based on information received from a variety of sources which we believe to be reliable, but are not guaranteed as to accuracy or completeness by atomos. Any expressions of opinion are subject to change without notice.


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