Mind the Gap: Why Women Are Retiring with Less, and What You Can Do About It

Retirement should be a time to enjoy the rewards of years of hard work, whether it’s traveling, spending time with family, or simply relaxing. But for many women, the financial gap in pensions is hard to ignore. Even with progress on gender equality, women are still retiring with far less than men. It’s time to ask: why is this happening, and how can we fix it?

In this piece, we’ll explore the gender pension gap, why it persists, and what steps you can take to address it for yourself.

A Stark Reality: The Numbers Don’t Lie

When we talk about the gender pension gap, it’s one thing to hear about it. But when you look at the numbers, the issue becomes much clearer.

Take Switzerland. In 2022, the average pension for women was CHF 36,433, while men received CHF 52,672, a gap of CHF 16,239, or 30.8%. This isn’t simply about personal savings choices; it’s a structural issue. And the trend is consistent across many countries.

In the UK, for instance, women retire with around £100,000 less than men. That’s a huge difference, and it’s not improving. Meanwhile, in Germany, women receive 46% less pension income than men, often due to factors like part-time work and extended parental leave.

This is a global issue, but it’s one that individuals can take action on, if they know how.

The Causes of the Gender Pension Gap

Why does this gap exist in the first place? Several key factors contribute:

• Part-time work and caregiving: Women are more likely to work part-time, especially during caregiving years. In many systems, this results in fewer contributions to pensions, particularly in cases where part-time work doesn’t count toward pension savings.
  
  
• Career interruptions: Maternity leave and time spent caring for children or elderly relatives mean lost years of contributions.
  
  
• Lower lifetime earnings: On average, women earn less than men over the course of their careers, which means smaller pension contributions and less growth over time.
  
  
• Longevity risk: Women generally live longer than men, meaning their retirement savings need to last longer. A smaller pension becomes more problematic when you factor in a longer life expectancy.
  

Why It Matters

The gender pension gap is more than just numbers. It reflects inequality that has long-term consequences for women in retirement. A smaller pension means a lower quality of life, a greater reliance on state support, and a higher risk of poverty in later years. This gap is more than an issue of financial security; it’s an issue of fairness.

How to Start Closing the Gap

The good news is there are steps you can take to help close the gap, both personally and through systemic changes.

• Get informed: Financial literacy programs aimed at women can help you understand your pension options and make smarter decisions earlier in life.
  
  
• Review pension policies: Employers and governments have an important part to play. Adjusting pension systems to include part-time workers or offer contribution credits during career breaks can make a meaningful difference.
  
  
• Act early: Regularly review your pension and make adjustments as needed. Major life changes—like having children or changing jobs, can affect your contributions, so it’s important to stay on top of things.
  
  
• Contribute voluntarily: Consider topping up your pension when possible, or look into spousal contributions if you take time off work to care for family. Even small contributions can make a difference in the long run.
  

What’s Next?

The gender pension gap is a significant challenge, but it’s one we can begin to address today. By understanding the reasons behind the gap, taking proactive steps, and seeking advice when needed, you can work toward a more secure retirement.

If you’re unsure where to begin, or if you’d like more personalised guidance, don’t hesitate to reach out. Our team can help you assess your pension and develop a plan that works for you.

Speak to Skybound Wealth

Need help understanding your pension plan or closing the gap in your retirement savings? Schedule a consultation with our experts today, and we’ll work with you to build a strategy that secures your financial future.