Report highlights role of menopause in gender pension gap

A new report by Royal London highlights the role menopause may pay in women’s lifetime savings and pensions.

Studio shot of a mature woman with silver hair staring into camera with a slight smile


The menopause can have a dramatic impact on women’s pension savings and contribute to the gender pension gap, according to a new report.

The report, ‘Bridging the Gender Pension Gap’, by the UK’s largest mutual life and pensions company, Royal London, looks at the unique retirement planning challenges women face as well as the contrasting attitudes and savings behaviour of women and men. It says that while challenges that contribute to the gender pension gap such as the unequal distribution of caring responsibilities and the eligibility criteria for automatic enrolment which disadvantages those (mainly women) in part time work are well established, less attention has been focused on the menopause in discussions about women’s retirement savings.

Yet, it says, menopausal symptoms have forced thousands of women to reduce their hours or worse still, leave work altogether.

Its analysis focuses on the case of a 50-year-old woman in full-time work* until the state pension age of 67 who it says could be better off by over £126k in pension savings when compared to a counterpart who stopped working at the same age. And it estimates that women reducing their working hours at age 50 could lose out on £63k in their pension pot.

The report notes that workers are most focused on saving when approaching their retirement, with those aged 55 and over saving the greatest amount, more than twice as much as those aged 18-34. “Being able to save during this stage of life is critical to achieve healthy retirement savings,” says the Royal London.

The report also says there are significant disparities between women and men when it comes to their confidence, approach to and outlook for retirement. The study finds that men are saving more into their workplace pension. Just 20% of eligible women contribute over the statutory minimum of 8% to their workplace pension, compared to 28% of men.

Part of this is due to their earnings: 50% of women view their earnings as a barrier to saving more versus just 30% of men. As a result of saving less, the report says women are significantly less confident than men that their pension contributions will be enough to provide them with sufficient income for the duration of their retirement. Almost half of women (48%) said they weren’t confident, compared with only 28% of men. Overall, the report says, women have much wider and deep-felt concerns about what retirement may have in store for them.

Clare Moffat, pensions expert at Royal London, said: While the introduction of automatic enrolment 10 years ago helped more women than ever save into a pension, the UK still faces a yawning gender pension gap.

“Women in their 50s, for a variety of reasons, are much more susceptible to leaving the workforce than men. Separate studies show that caring responsibilities mean women are twice as likely to be forced to leave their job than men. However, a notable barrier to remaining in work, which is only just beginning to receive increased awareness, is the menopause.

“While symptoms vary between individuals, for many women the menopause can have a big impact on their everyday life, often resulting in them reducing the hours they work or stopping work altogether. It’s only further down the line that the resulting missed pension contributions becomes apparent, but by then it may be too late.”

*Based on a pension fund of £100k at age 50, earning £40k with 2.5% wage growth until state pension age of 67, investment growth of 5% (not including charges), monthly contributions of 10% and a 50% reduction in working hours/pay. 

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