The Gender Pension Gap

What It Is & Why Every Woman Should Care

Let me be direct: women in Ireland face a pension crisis that most of us aren't talking about enough. As a financial adviser, a woman and a mother of four who's been in this industry for over 20 years, I see it every day. The gender pension gap is real, it's significant, and it affects your future financial security in ways you might not realise. So, let's talk about what the gender pension gap actually means for you, and more importantly, what you can do about it.

What Is the Gender Pension Gap?

In basic terms, the gender pension gap is the difference in private pension pots between men and women. And the statistics are stark: Women's pension pots are up to 35% lower than a man's. Women may need to work 8 years longer than men to receive the same pension benefits. Approximately half of men have a private pension. For women? Less than one in three. And here's the real kicker: women statistically live longer than men, which means we need more in our pension pots to last through those extra years. The gender pension gap is significant and needs to be taken seriously. This isn't just about numbers on a page. It's about your quality of life in retirement.

Why Does This Gap Exist?

The key driver is the time women take out of employment to care for children. Using my own career as an example, I've been in the financial sector for 24 years and am a mother of four children, so I've taken multiple maternity leaves. This means I need to be more aware of my pension gap and how to manage it. While things are changing regarding paternity leave and men's roles in family caring, the bulk of caring work is still done by women. Employment and pensions go hand in hand. If you're not working, you miss the tax benefits of pension contributions.

Women who take time out of paid employment are missing out on those years of contributions to their pension and the compound growth that builds up over time.

Women are also more likely to be in low-pay, part-time employment, which means lower pension contributions overall.

Will Auto-Enrolment Help?

Ireland's auto-enrolment scheme, My Future Fund, is to help bring in people who don't already have a private pension, and that's a good thing. However, I don't think it will help the gender pension gap. Why? Because the scheme focuses on paid employment and continues to ignore support for unpaid care work, which is far more likely to be taken on by women.

A 2024 study by the National Women's Council, "Still Stuck in the Gap: Pensions Auto-Enrolment from a Gender and Care Lens", confirms there's little to be positive about in addressing the gender pension gap through auto-enrolment.

The government needs to address the loss of earnings through caring work. What will make a real difference to the gender pension gap is a movement towards a more equitable distribution of caring responsibilities between both partners that will reduce the disproportionate impact on women in terms of loss of income.

While it's very disappointing that auto-enrolment doesn't acknowledge the importance of caring for financial well-being in later life, women can and must be proactive and take the matter into their own hands.

The Worrisome Mindset We Need to Change

Over the years, I've noticed that many people believe a pension is and can be a joint project. I've often heard women say that their husbands have a great pension that will cover them, too.

We must change that mindset. Pensions are an individual matter, and women should be encouraged to have their own independent pension pots for the flexibility and security it will give them.

It's essential to encourage women of all ages to build their own strong pension and not see it as selfish to prioritise their financial security, even if their partner already has a good pension. No one knows what the future holds, and we are all entitled to protect our financial security.

What You Can Do Right Now

As I see it, it's often our nature to look after everybody before we look after ourselves, and that's true with pensions as it is with other things in life. There's nothing selfish about ensuring you have enough money for your retirement. In a way, addressing the gender pension gap is like financial planning advice: you've got to take control, be proactive, and get advice.

A pension is essentially a long-term savings plan with tax benefits. It's not as daunting as it sounds. There's a lot of help available, and once you've taken your first steps, you'll have financial peace of mind. I advise taking an hour out to meet with an adviser, talk through your situation, and put a plan in place.

Moving forward is so much easier with a foundation laid. Even if you change jobs or your situation changes, you have that relationship with an adviser who can help you adapt and maintain good habits.

My Personal & Professional Perspective

I feel I am living proof of what women experience in their working lives, including time out, juggling family and work, and caring. I have lived it and learned from it.

I am very passionate about this subject because I think there's huge potential for women to achieve better returns and better manage their money. The gender pension gap doesn't have to be your reality if you take action, and do it now, don't wait even longer.

The Bottom Line

After all, life is hard, working is hard, and we all want to enjoy our retirement. We've earned it! Don't let the gender pension gap rob you of the retirement you deserve. Take control, be proactive, and start building your independent pension today.

If you'd like to discuss your pension situation and put a plan in place, I'm here to help.