How to close the gender pension gap

Women in the UK would need to work nearly two extra decades to retire with the same financial security as their male counterparts.

The gender pension gap isn't built overnight; it's the compounding result of years of pay disparity, career interruptions, and health journeys that the working world was never designed to accommodate.

Closing the gender pension gap demands more than a salary audit. It requires HR teams to look at the full arc of their female employees' working lives and go beyond salary figures alone to address the cumulative health and life events that are impacting the gender pension gap.

Whilst there is no one quick fix,there are steps employers can take to help close the gender pension gap for female employees.

Understand the scale of the gap

Department for Work and Pensions research from 2022 found that, on average, men have 35% more in their private pension pots. The Pension Policy Institute found in 2024 that in the UK women are 19 years behind men when it comes to wealth accumulation for retirement.

Addressing this gap will help build a more loyal and productive workforce, reduce financial stress relating to retirement savings, and provide a competitive advantage when attracting diverse talent.

Identify moments that have led to the gap

The gender pension gap is rarely the result of a single decision; it is the compounding effect of several significant life stages where women's financial and career trajectories are often disproportionately impacted.

Modern workplace pensions were designed for a linear career path and fail to account for the non-linear, less traditional reality of modern work life.

The motherhood penalty: Women's pension contributions will be significantly reduced during each period of statutory maternity leave. Additionally, career breaks and reduced working hours for childcare lead to immediate drops in pension contributions. 17% of women leave work entirely within 5 years of their first child, and 68% say their careers have stalled after having a child. Without intervention, this period creates a permanent deficit in a woman's future earning potential and current retirement pot.
Reproductive health: Chronic women's health conditions such as endometriosis, PCOS, and fibroids often lead to more frequent unplanned absences and stalled progressions. The cost of medication, specialist gynaecological care, fertility treatment, and period care mean women spend more of their personal finances on their health which could otherwise be saved or invested for their future.
Menopause: A study run by Fertifa found that 1 in 10 women leave the workforce or take on significantly reduced responsibilities due to unmanaged menopause symptoms. This often comes at a time when they are at the peak of their earning and pension contribution potential. However, with the right workplace and medical support in place, 32% say their attendance and enjoyment of work improved, and 44% said their overall wellbeing had improved.

Identifying and addressing health disparities will benefit all of your people and ultimately your business.

Practical strategies for HR and People

Closing the gender pension gap requires a proactive, multi-faceted approach:

The legislative backdrop: The Employment Rights Act provides an important foundation here. The Act strengthens employees' rights to flexible working from day one of employment and introduces stronger protections around family leave - both of which directly address some of the key career interruptions that drive the gender pension gap. HR teams should treat these legislative changes not as ticking a compliance box, but as a starting point for going further.
Pay and promotion transparency: Standardised pay bands and writing down clear promotion criteria. This removes the negotiation penalty, where women are 26% less likely to negotiate a pay rise (Glassdoor, 2021), and ensures women are not left behind due to a lack of transparency.
Go beyond statutory minimums: To combat the motherhood penalty, employers should pay pension contributions during all family leave (maternity, paternity, and adoption) based on the employee's full salary, rather than just the actual pay received during leave.
Equal parental leave: Equal and enhanced maternity, paternity and caregiver leave means all parents benefit from family leave to welcome a new child, receive pay and pension contributions during this time, and it will reduce or remove any subconscious promotion or hiring bias against women - as all employees are entitled to the same leave.
Foster an open culture: Policies are only as effective as the culture that supports them. Leadership must lead by example, role-modelling the use of family leave and health support services.
Provide financial education: Many employees enter the workforce with zero knowledge of pensions or tax efficiency. When 100% of an employee's financial life (salary, insurance, and pension) is managed by the employer, the employer has a duty to ensure staff understand the value of these benefits.
Provide holistic health and financial support: Audit the benefits and policies you have to see if they are appropriately addressing the life stages that impact women's career trajectory and subsequent pension potential.

The gender pension gap is not inevitable, it is the result of a system that was never built with women in mind. And the cost of inaction falls not just on employees, but on organisations themselves.

Organisations that take deliberate steps to address the reproductive health challenges and life stages that shape women's financial trajectories, won't just close the gap. They'll retain their best people at the peak of their experience, strengthen their performance, and build workplaces where every employee has a fair shot at financial security, long after their working years are over.