The retirement income gender gap is narrowing, but many women are still at risk of falling short, says Scottish Widows.
According to the firm’s latest Women and Retirement Report, women’s median projected retirement income has risen to £14,500 a year, up £1,500 on 2025 projections.
The disparity between men and women’s projected annual retirement income has narrowed from £6,000 in 2025 to £3,800 today, reflecting a combination of narrowing gender pay differences, higher state pension entitlement and growth in women’s other savings.
However, Scottish Widows said women’s retirement prospects remain mixed. Just over a quarter (27%) are on track for a comfortable retirement, while a third (33%) risk retirement poverty, which equates to less than £13,900 a year for a single person.
Jill Henderson, retirement expert at Scottish Widows, said: “The fact that the gender pension gap is at its narrowest point since the National Retirement Forecast began is proof that progress is possible. More women than ever are building towards genuine financial resilience in later life.
“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 Scottish Widows and Lloyds Banking Group’s own data found that young women face disadvantages early in their careers. One in seven (14%) women under 30 earn below the £10,000 automatic enrolment threshold, while 71% of women with a Scottish Widows workplace pension aged 22-25 years-old contribute 10% or less of their pay, compared with 64% of men.
However, Scottish Widows said digital tools can help younger women understand pensions, navigate decisions and start saving early. Women aged 18-34 who find retirement tools helpful are almost twice as likely to expect to maintain their standard of living in retirement as those who use none (38% versus 19%).
Susan Hope, retirement expert at Scottish Widows, added: “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.”
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