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'Alarming' number of women opt out of pension contributions

'Alarming' number of women opt out of pension contributions
Matt Browning
Written By:
Matt Browning

Two-thirds of women are concerned they will run out of money ahead of retirement, but many still cut their contributions, a pension service finds.

A third of women aged between 22 and 29 years old are also unaware of how much they’ll need when they reach pension age. Despite this, a tenth (10%) of women in that age group have opted out of their employer’s pension scheme, a Scottish Widows survey of 5,000 respondents revealed.

The reasons for doing so were due to not affording regular pension schemes (29%) and spending the money now rather than saving for the future (14%).

Compared to men, fewer women are contributing to their pension from an early age too. Just 14% of women add to their retirement fund by the age of 22, whereas 19% of men make that decision, furthering the UK’s gender pensions gap.

Despite this, a quarter (23%) of women in their 20s would be ‘frustrated’ if they couldn’t retire by the age of 60 – six years earlier than the state pension age.

That decision is just one of many factors creating a disparity in pension pots, which leaves women 10% financially worse off than men by the age of 22 and 50% worse off by the age of 50.

As well as taking time off work to raise families and afford childcare, a deciding factor in the gap in pensions is the disparity between men’s and women’s earnings. On average, a man will earn £33,000, whereas a woman will earn £24,800, meaning women will have to work for an extra 19 years to match men’s savings’ amount.

‘Significant gap between expectations of men and women’

As well as societal issues causing women to have less than what men have during retirement, the gap in expectations is also an issue.

Jackie Leiper, managing director of Scottish Widows, said: “Our research shows a significant gap between the expectations of women, and the action taken to meet those expectations. Alarmingly, 10% have opted out of their workplace pension, meaning they are missing out on compound interest gains and, crucially, the ‘free money’ that comes with employer pension contributions. Opting out of your employer’s pension scheme is tantamount to taking a pay cut.

“The hard truth is, by the time these women reach the end of their working lives, they may face a much harder retirement compared to those who have consistently contributed. Compounded further by often having to take enforced career breaks. The good news for anyone in their twenties, though, is that time is on their side.”

Leiper added: “Urgent action is also required to help tackle the gender pension gap. Education on how to support women with the steps to engage in their pension early is a must, but when combined with policy changes, it will play a crucial role in helping all women actively take control of their pensions and start thinking about future savings decisions.”

Here are six tips from the pension provider for women to increase their retirement funds.

Six tips to maximise your kitty

  1. If you can, save before starting a family: Paying a bit more into your pension before children come along could help lessen the financial impact of taking time off work later. If you’ve got a partner, you could agree on how you’ll balance the financial impact together by splitting childcare costs (women typically pick up the majority of these), sharing parental leave or asking them to top up your pension if and when you’re off work.
  2. Save while you’re young: Saving into your pension in your 20s is your best opportunity to beat the pension gap because your money is invested for longer and has more time to grow. But, to help you have the best chance of achieving pension equality, women need to be saving more into their pensions than men.
  3. Stay on top of pension admin: Track your previous pensions down using the Government’s pension tracing tool at When you locate it, you might be able to combine it with any other pensions you have so they’re easier to manage.
  4. Chat about pensions during childcare planning: Chat with your partner about how you can share the financial impact of raising a family between you. Simple changes like splitting childcare costs, shared parental leave or asking your partner to top up your pension can help reduce the impact on your pension.
  5. Entitlement to state pension: If you’re eligible for the state pension, and you’ve taken time out of work to raise a family or care for a loved one, it may have impacted your state pension entitlement if you didn’t claim child benefits or Carer’s Allowance to keep your National Insurance credits. Go to to check your projected state pension entitlement.