A new report from Scottish Widows estimates that 33% of women who have yet to retire face the prospect of falling below the minimum income needed for a basic standard of living in retirement, defined as less than £13,900 a year for a single person or £22,500 for a two-person household. Among men, 30% are projected to retire below the minimum income standard.
Gender pension gap narrows
The research, based on Scottish Widows' annual retirement report survey and using Pension UK's retirement living standards, also suggested that the pensions gender gap has begun to close. Women's median average projected retirement income climbed to £14,500 a year, an increase of £1,500 compared with projections in 2025. This compares with £18,300 for men.
Scottish Widows noted that the gap between men and women had narrowed from £6,000 in 2025 to £3,800 in 2026. The financial firm attributed the narrowing gap to shrinking gender pay differences, higher state pension entitlement and growth in women's wider savings.
Early career contributions lag
Jill Henderson, a retirement expert at Scottish Widows, said: "Change must happen faster. Too many women face a retirement of financial hardship, with life events such as unpaid caring responsibilities, menopause and relationship breakdowns disrupting their ability to save. Understanding how long-term savings are tracking is essential to helping women stay financially secure."
Analysis of Lloyds Banking Group and Scottish Widows' own customer data indicated that one in seven (14%) women aged under 30 were earning below the £10,000 threshold to be automatically enrolled into a workplace pension, compared with 9% of men. Among 22 to 25-year-olds with a Scottish Widows workplace pension, 71% of women contribute 10% or less of their pay, compared with 64% of men.
Policy changes urged
Susan Hope, a retirement expert at Scottish Widows, said: "Our data shows that the pension gap takes root from a woman's very first job. But closing it requires more than better awareness – it means fundamentally changing the systems that shape women's financial futures. From pension enrolment and parental leave to support through divorce, menopause and illness, policy and workplace changes must better reflect women's lives and help them build financial security at every stage."
Scottish Widows commissioned YouGov to survey more than 5,200 adults across the UK. The research was carried out in August.
