Career breaks and part-time work leave women with lower pension wealth – Broadstone

Pension wealth among women is significantly lower than for men, due to career breaks for childcare and part-time work, leading to long-term financial insecurity in retirement, according to Broadstone.

The Wealth & Assets Survey found that a smaller proportion of women contribute to their occupational defined contribution (DC) pensions, resulting in significantly smaller median pension pots.

The findings focus on workplace pensions provided by employers and do not include private, personal, or defined benefit (DB) pensions, but highlighted structural issues contributing to pension inequality in the workplace.

Broadstone’s research showed that 23% of men aged 16 and above actively contribute to their occupational DC pension, with a median pot size of £10,000.

In contrast, only 19% of women contribute, with a median pot size of £5,000.

The gap was particularly pronounced for workers mid-career, where only 25% of women aged 35 to 44 contributed compared to 33% of men, leaving them with a median pension of £6,700 compared to £12,000 for men.

Among those aged 45 to 54, 25% of women contributed to their occupational DC pensions compared to 32% of men, with median pension wealth at £7,400 for women and £15,000 for men.

As the pension gap widens over time, by age 55 to 64, men and women contribute at similar rates, with 21% of men and 18% of women making active contributions, but men were found to have nearly three-times the pension wealth, with a median pot of £24,000 compared to £6,800 for women.