Career breaks push one in three women into pension poverty

More than a third (36%) of women face poverty in retirement, according to Scottish Widows’ latest Women and Retirement Report 2025.

The research reveals that more than half (58%) of women at or near retirement have taken a career break compared to just 12% of men, and women are 12 times more likely to take a break in career in order to raise children (36% vs 3%), leading to loss of income and gaps in their pension contributions.

By age 55, one in four (24%) women have been out of work for more than five years – which could result in a £70,000 hit at retirement.

Women taking a five-year career break at 35 years old¹, as an example, would reach age 67 with a pension worth £512,000². This is £69,380 less than women who don’t take a break in their career, with the gap driven by both missed contributions and lost investment growth.

Failure to plan ahead creates financial pressure for certain groups

Whilst Scottish Widows’ data shows that women manage their money slightly better than men during career breaks (61% versus 58%), they are less likely to plan for them financially.

Adding to this pressure, the research shows that two fifths (40%) of women didn’t plan financially for their career break, and over half (56%) never considered the impact it would have on their retirement. And, as many as 42% of women found that the break in their career reduced their ability to save, compared to 37% of men.

This year Scottish Widows has calculated the median total private pension³ for women at retirement is £173,000 vs £286,000 for men. That means the gender pension gap between women and men is now £113,000 (32%) – an increase since last year’s £100,000 (30%).

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.

“There are a couple of straight-forward ways to help address these gender pension concerns. We need to improve awareness and take-up of shared parental leave policies. This policy is critical, yet four in five (80%) women who had children in the last 10 years didn’t take advantage of it. This represents around 2.7 million working mothers⁴, and 8% revealed that their spouse’s workplace was not supportive.

“Separately, spouses should be actively saving into women’s pensions during any career breaks, if possible. This is also known as third party contributions and, while often overlooked, is a helpful financial planning tool. Not only can it maximise tax relief for those who have used up their allowance, this can help to plug gaps in pension contributions while earning power is limited.

“Employers also continue to play an important role in pension contributions during maternity leave. Fortunately for women, employer contributions in a workplace scheme are often calculated based on their pre-leave salary.”

Dame Denise Lewis (DBE), former Team GB track and field athlete, working with Scottish Widows on the launch of the Women and Retirement Report, said: “Throughout my sporting and punditry career, there have absolutely been times when I’ve stepped away from work, whether that was due to injury or raising my family. Those experiences taught me first-hand how important it is to have a financial plan that gives you security when your income is more up and down – something so many women can relate to.

“And crucially it’s not only a challenge at the time, it also has a real impact on our futures. The more we can encourage women to start those vital kitchen table conversations about what their future looks like and how they’ll afford it, the better.”

Methodology

The Women and Retirement Report was conducted online by YouGov Plc from 29th August to 8th September 2025 across a total of 4,091 adults aged 18+, weighted to be representative of the UK adult population. The survey asked general questions on pensions and retirement planning, as well as savings, investments, career breaks and financial planning behaviours.