The gender pension gap has widened to £113,000, with career breaks pushing more than one in three (36%) women towards poverty in retirement, according to the latest Scottish Widows Women and Retirement Report.
The 2025 report reveals the median private pension pot for women at retirement is now just £173,000, compared to £286,000 for men. This 32% gap is an increase from 30% last year.
The research places the blame squarely on the “motherhood penalty” and career breaks. Women are 12 times more likely than men to take a break from work for childcare (36% vs 3%). By age 55, nearly one in four (24%) women have been out of the workforce for five years or more.
Scottish Widows calculates that a woman taking a five-year career break at 35 could see her final pension pot reduced by £69,380 due to missed contributions and lost investment growth.
This financial damage is compounded by a lack of planning. The report found:
Susan Hope, retirement expert at Scottish Widows, said: “Millions of women in the UK are living with the gender pension gap and they don’t even know it. To achieve true equality in retirement, we need to make sure career breaks don’t break women’s future financial security.”
It will take another 20 years to close the gender pensions gap, says Scottish Widows
Hope called for two key changes:
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Shared Parental Leave (SPL): Improve awareness and take-up of the “critical” policy. The report found four in five women (80%) who had children in the last 10 years did not use it, with 8% citing an unsupportive workplace for their partner.
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Spousal Contributions: Encourage spouses to “actively” make third-party contributions into their partner’s pension during a career break to plug contribution gaps.
The report also issued a direct call to advisers, highlighting that new solutions are needed to close the now £113,000 gap.
For homeowner clients, the report suggests equity release could be a powerful tool. It found that women aged 55+ who own their home could, on average, access around £100,000 in housing equity. The report states that “unlocking ~£100,000 of housing equity would almost close this gap” and urges advisers to use this “life-stage framing”.
Scottish Widows also urged advisers to ensure pensions are a central part of any divorce discussions and to promote more accessible advice models aligned with the new FCA ‘targeted support’ regime.
