Gender gap is up to 76% in parts of the UK
Female pots almost 50% smaller once women reach their 50s
PensionBee calculates that women can bridge the gap with some manageable one-off contributions in their 20s, 30s and 40s

PensionBee has discovered a clear pension gender gap across the UK, which varies depending on region and a saver’s age.

According to the online pension manager’s analysis women sit on an average pot of £16,083, a figure significantly smaller than the average male pension of £23,416. This indicates a 31% UK pension gender gap between male and female pensions, although the gap appears to be much wider in certain regions.

Region	Average female pension (£)	Average male pension (£)	Gender gap (%)
England	16,390	23,755	31
East Midlands	11,513	17,011	32
Greater London	19,415	26,538	27
North East	8,209	16,531	50
North West	11,361	16,809	32
South East	20,638	31,220	34
South West	12,590	17,761	29
West Midlands	11,666	22,159	47
Northern Ireland	4,031	16,485	76
Scotland	15,737	23,291	32
Wales	8,552	17,417	51
United Kingdom	16,083	23,416	31

Source: PensionBee, based on a sample of 5,098 savers. More details on the sample are in the Appendix.

In Northern Ireland, for instance, women sit on a pot of £4,031 - a pension that’s a shocking 76% smaller than the average male pension in the same region (£16,485). This isn’t an isolated case, either, as pensions in Wales and the North East are also split significantly by gender. In both instances these regions indicate a pension gender gap of around 50%.

Interestingly, it appears that regional inequality is associated with gender inequality, as the regions of Wales, Northern Ireland and the North East have a lower than average UK pot size. This is further illustrated by Greater London having the smallest pension gender gap, and the second biggest average pension pot size (Appendix A).

PensionBee also examined the relationship between the pension gender gap and age, and discovered a disparity that increases significantly once women reach their 50s.

Age Group	Female pension (£)	Male pension (£)	Gender gap (%)
Under 29	3,309	4,927	33
30 - 39	12,951	15,923	19
40 - 49	26,901	38,384	30
Over 50	31,254	53,449	42
Average	16,083	23,416	31

Source: PensionBee, based on a sample of 5,098 savers. More details on the sample are in the Appendix.

However, calculations by PensionBee suggest that the pension gender gap can be closed with some relatively straightforward interventions by women, namely contributing an extra £1,000 in their mid-20s, an extra £2,000 in their mid-30s, and an extra £3,500 in their mid-40s (Appendix B). Closing the pension gender gap may still not be sufficient for women to achieve a good retirement income though, according to the online pension manager’s retirement readiness analysis (Appendix C).

Speaking on the findings, Romi Savova, CEO of PensionBee said: ”It’s not fair that a pension gender gap exists, but given the reality of lower pay as disclosed by most UK companies, it is important that women take action early on to stop income inequality becoming a life-long burden. Targeted pension contributions are a great way to put women back on an equal footing and something every woman should consider as part of her retirement planning.”

Note to Editors

Romi Savova, CEO of PensionBee available for interview or comments.

For more information, please contact:

Jasper Martens
020 3859 5788
press@pensionbee.com

Appendices

We compared 5,098 individuals with PensionBee pensions, who are broadly distributed like the general UK population between England, Northern Ireland, Scotland and Wales, albeit with a slightly higher concentration in London.

The sample includes 1,375 women, representing 27% of the sample and 3,723 men, representing the remaining 73% of the sample. The sample represents an age group of 22-63 years with an average age of 37. The average salary of the sample group is £46,883, so higher than that of the broader UK figure of £30,537, according to figures from Monster.

Appendix A: Average pension size by region

Region	Average pension (%)	Sample
England	21,730	4,544
East Midlands	15,531	435
Greater London	24,503	1,605
North East	14,513	303
North West	15,509	492
South East	28,183	991
South West	16,356	393
West Midlands	19,203	325
Northern Ireland	14,796	60
Scotland	21,482	337
Wales	15,473	157
United Kingdom	21,441	5,098

Source: PensionBee. Note many customers will have additional pensions to transfer to PensionBee, but we do not believe this impacts any particular region disproportionately.

Appendix B: Calculations on closing the gender gap

The gender gap can be closed with some relatively straightforward interventions by women, namely making an extra one-off contribution of £1,000 in their mid-20s, an extra £2,000 in their mid-30s, and an extra £3,500 in their mid-40s.

Age Group	Female pension (£)	Male pension (£)	Gender gap (%)
Under 29	4,309	4,927	13
30 - 39	16,918	15,923	-6
40 - 49	38,206	38,384	1
Over 50	53,491	53,449	0

Source: PensionBee, based on 7% annual returns on additional female contributions. We have assumed 7% returns to represent an equity-oriented default fund.

Appendix C: Average salaries and replacement ratios in retirement, including the state pension

Using a prediction model, average pot sizes, average ages and average contribution rates, we forecasted the replacement ratio for each region. Specifically, we calculated how much of the annual salary for a region would be replaced through a private pension and the state pension of £8,279 when the individual receives it.

Region	Salary (£)	Replacement ratio (%)
England	48,344	26
East Midlands	32,303	33
Greater London	60,037	22
North East	37,819	32
North West	39,461	28
South East	54,151	26
South West	32,633	34
West Midlands	39,623	31
Northern Ireland	32,168	42
Scotland	35,427	35
Wales	37,442	34
United Kingdom	46,883	27

Source: PensionBee. We have assumed the pension grows at an annual rate of 5% and that annual charges are 0.7%. Inflation of 2.5% reduces the rate of return. It is assumed that the pot is converted into an annuity at the age of 65 and the annuity rate is 2%. The annuity expense ratio is 4%. We have assumed individuals take their 25% tax free lump sum prior to purchasing an annuity. The full state pension at current levels has been included in the expected annual income.

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