New analysis from leading online pension provider, PensionBee, reveals men’s average quarterly contribution amounts increased by 32%, from £801 in Q3 2020 to £1,058 in Q3 2021. Women’s average quarterly contribution amounts also increased by 15% in the same period, from £699 in Q3 2020 to £768 in Q3 2021.
As a consequence of these increased contribution amounts, the size of the average pension pot for both men and women grew by almost a fifth (19%), from Q3 2020 to Q3 2021. The average male pension pot stood at £25,251 in Q3 2021, compared to £21,018 the year before, while the average female pension pot was £15,099 in Q3 2021 compared to £12,699 the year previously.
These differences account for a 40% gender pension gap in Q3 2021, consistent with the previous year. This latest analysis supports PensionBee’s earlier findings that the gender pension gap only widens with age, as in Q3 2021 the gap for savers aged 55 and above reached 49%. This is, however, slightly lower than in Q3 2020, where the gender pension gap for savers in this age bracket hit 53%.
This persistent pension gap, caused by a combination of lower salaries and long career gaps, is a significant disadvantage for women. It indicates that as a woman moves closer to retirement she has significantly less savings than a man of a similar age, and may face a less certain financial future. As a woman in her fifties will have less time to reduce the gap than a woman in a younger age bracket, she may have to work longer than anticipated, or become reliant on the State Pension to make up for the shortfall.
Yet, despite men’s quarterly contribution amounts and their overall pot size being much larger in value, slightly more women (22%) made contributions to their pension than their male counterparts (19%) in Q3 2021. Notably, a higher proportion of women also opted to keep more of their money invested than men in Q3 2021. Only 4% of eligible female savers (aged 55 and over) made withdrawals to their pensions in this quarter, compared to 13% of eligible male savers during the same period.
Romi Savova, CEO of PensionBee, commented: “It’s reassuring to see consumers prioritising their pensions by increasing their average contributions, and in turn bettering their retirement outcomes. This is particularly encouraging during the extended periods of economic uncertainty we’ve seen in recent years.
It remains disappointing to see that women have significantly less in their pension pots than their male counterparts, and reaffirms the need to tackle wage inequality and offer gender inclusive parental leave. We must continue to encourage female savers to keep paying into their pension, as the more they can contribute today, the more they will be able to improve their quality of life in retirement.”
Appendix
Table 1: Year on Year quarterly pension contribution amounts
| Men’s average quarterly contribution amounts (£) | Women’s average quarterly contribution amounts (£) | |
|---|---|---|
| Q3 2020 | £801 | £699 |
| Q3 2021 | £1,058 | £768 |
| Growth | 32% | 15% |
Source: PensionBee, November 2021. Based on 104,000 invested customers as at 30 September 2021. Rounded to whole numbers.
Table 2: Year on Year average sized pension pot
| Men’s average pot size (£) | Women’s average pot size (£) | |
|---|---|---|
| Q3 2020 | £21,018 | £12,699 |
| Q3 2021 | £25,251 | £15,099 |
| Growth | 20% | 19% |
Source: PensionBee, November 2021. Based on 104,000 invested customers as at 30 September 2021. Rounded to whole numbers.
Table 3: Year on Year gender pension gap
| Gender pension gap all customers | Gender pension gap for customers under 55 | Gender pension gap for customers age 55+ | |
|---|---|---|---|
| Q3 2020 | 40% | 35% | 53% |
| Q3 2021 | 40% | 35% | 49% |
Source: PensionBee, November 2021. Based on 104,000 invested customers as at 30 September 2021. Rounded to whole numbers.
Table 4: Year on Year proportion of customers making contributions
| Proportion of men making contributions to their pension (%) | Proportion of women making contributions to their pension (%) | |
|---|---|---|
| Q3 2020 | 17% | 20% |
| Q3 2021 | 19% | 22% |
Source: PensionBee, November 2021. Based on 104,000 invested customers as at 30 September 2021. Rounded to whole numbers.
Table 5: Year on Year proportion of customers making withdrawals
| Proportion of men making withdrawals from their pension (%) | Proportion of women withdrawals from their pension (%) | |
|---|---|---|
| Q3 2020 | 15% | 5% |
| Q3 2021 | 13% | 4% |
Source: PensionBee, November 2021. Based on 104,000 invested customers as at 30 September 2021. Rounded to whole numbers.
