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Women risk depleting their pension savings 14 years earlier than men, potentially leaving them short for more than a decade before the end of their lives, new research reveals.
A study by Legal & General (L&G), released ahead of International Women’s Day, found women could exhaust their private pensions by age 73, based on current withdrawal rates.
With the average life expectancy for a 60-year-old woman in the UK at 87, this leaves a potential 14-year gap where retirees may face financial strain. In contrast, men are projected to see their pension pots emptied by age 83, according to the research.
This disparity highlights the significant financial vulnerability women face in retirement, underscoring the need for greater awareness and planning.
With the average life expectancy of a 60-year-old man in the UK at 85, men could have two years of retirement without any leftover private pension savings.
Katharine Photiou, managing director of workplace savings at L&G, said that, after decades of saving, the ability to withdraw money from a pension can create a “lottery effect”.
But she cautioned: “What seems like financial freedom now might turn into uncertainty later.”
The modelling used Office for National Statistics (ONS) life expectancy calculations as well as an Opinium survey among 3,000 people aged over 50 carried out in December 2024.
The calculations made various assumptions about inflation and investment returns and that people would start making regular withdrawals when they turned 67 until their private pension pot ran out. It was also assumed that people had no other sources of income, such as property wealth or a guaranteed pension income based on someone’s salary.
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The research indicated that women are typically withdrawing less from their pension than men but have less money saved into it to start with, at £40,000 versus £87,500 for men.
Of those receiving income from an income drawdown pension, women are receiving £625 per month on average, compared with £875 for men.
However, women were more likely than men to have increased their withdrawal rate since they first started making withdrawals.
More than a quarter (27 per cent) of women making withdrawals had increased their withdrawal rate, compared with less than a fifth (19 per cent) of men.
The research was released as a survey of 2,000 people for savings and investment app Moneybox, which found that nearly one in 10 (9 per cent) women plan to start investing this year, while 13 per cent intend to increase their investments.
Investing more was found to be the top financial goal among women aged 25 to 34 years old, the survey by OnePoll found.
More than half (59 per cent of women who invested last year did so to grow wealth, 47 per cent wanted to secure a comfortable retirement, and 34 per cent were aiming to provide for family in future. Nearly a fifth (18 per cent) of women who invested did so because they enjoyed it and treated it like a hobby.
London and Northern Ireland had the highest rates of female first-time investors last year, the Moneybox research indicated.
Lower, part-time salaries and caring responsibilities can be obstacles to some women – and some men – being able to save adequately for later life.
Catherine Foot, director of Phoenix Insights, said that while pay is a “major reason” behind the gender pensions gap, the disparity is “made worse by life events that women can face – such as motherhood, divorce, caring responsibilities, and menopause – which disproportionately affect their ability to save”.
She added: “Addressing the gender pension gap means thinking about how women are supported at every stage of their working lives, and encouraging employers to go above and beyond the minimum levels of support.
“This should include integrating greater workplace flexibility around caring commitments or a significant life event and expanding the accessibility of workplace pension saving, as women are much more likely than men to fall under the minimum auto-enrolment earnings threshold.”
Another study, from money platform Intuit Credit Karma, found that over half (59 per cent) of parents have taken on new debt to afford maternity or shared parental leave, borrowing an average of £2,658.
A quarter (25 per cent) of these parents said they were still in debt when their child had started school.
Women were less likely than men taking parental leave to say they had moved to a job with enhanced parental benefits.
A fifth (21 per cent) of men taking shared parental leave had switched jobs to an employer offering enhanced benefits, compared with 9 per cent of women taking maternity leave, the OnePoll survey of 2,000 people across the UK found.
Akansha Nath, general manager (international) at Intuit Credit Karma, said: “Setting aside savings where possible and carefully budgeting for your reduced income and unexpected expenses can help alleviate financial strain.”