Why thousands of women are missing out on full state pensions

Yahoo

29-07-2025

Last week's announcement of the new pension commission was accompanied by a deluge of papers and research. These highlighted key groups who are being left behind by the current pension system – among them were the self-employed, younger people and women.
The gender pension gap is an enormous issue – according to the research it stands at 48%. The most recent data (2020 to 2022) estimates that the average pension wealth of those aged 55 to 59 was £81,000 for women compared to £156,000 for men.
So why is this? Auto-enrolment has played an important role in getting more women saving into a pension, but major challenges remain. Women are more likely to take career breaks due to having children or looking after loved ones. If they return to the workplace, it is often on lower wages or in part time work and their prospects for career development are hampered.
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This mix of circumstances conspires to make sure women save less into their pension and get less out of it. Added to this, many women working part time do not earn enough to hit the auto-enrolment trigger so miss out on a workplace pension.
It's a fault not of women's making and needs reform, such as increased access to flexible working and good quality affordable childcare to help women return to the workforce and build their financial resilience.
There are a couple of top tips to be aware of that might prove useful though.
Workplace pension contributions
Wherever possible try and maintain your workplace pension contributions when you go on maternity leave.
If you qualify for statutory maternity pay, your employer needs to maintain their pension contributions if you are still in the scheme. This means that even though your contributions will dip as pay reduces, your employer needs to maintain theirs at the same level.
Contributions from your spouse
If you aren't working, it might be worth seeing if your spouse or partner can contribute to a pension on your behalf.
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You can currently contribute up to £2,880 per year to the pension of a non-working spouse and they will receive a tax relief top up from the government bringing it to £3,600.
State pension
Make sure you claim child benefit in your name as it comes with a national insurance credit that goes towards your state pension.
Many women miss out on this either because their partner has claimed the benefit in their name, or because families opted out of receiving child benefit after the introduction of the high-income child benefit tax charge.
Under this charge you receive child benefit but if you earn more than £60,000 the government starts to claw it back through a charge you need to pay through self-assessment. By the time you hit an annual income of £80,000 per year you effectively have to repay the whole of your child benefit. This led to many people opting out because of the admin hassle without realising the impact on their state pension.
Now you have the option of ticking a box that says you don't want to receive the child benefit, but you do want the national insurance credit.
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