Bridging the Multi-Stage Gap: Women’s Retirement Readiness in 2026
Career breaks can be both necessary and beneficial for women for a variety of reasons, and they are more likely to take them than men. However, while many are aware of the impact on finances, fewer see the effects on their path to retirement, which is increasingly uncertain for many women. While women are engaged and understand some of the implications, multi-stage financial gaps and planning disparities persist across different life stages. Recent data highlights a critical need for proactive support from financial advisers and providers to establish greater financial resilience among women.
The Widening Retirement Gap
The financial landscape for women heading towards retirement continues to deteriorate. The pension gap has widened from 30% to 32%. Concerningly, our own National Retirement Forecast shows that more than a third (36%) of women are heading for a below minimum living standard in retirement, compared to 31% of men. Further exasperating this disparity, the Gender Investment Gap is currently at a staggering £678 billion1.
The most significant factor driving this disparity is widely considered to be the impact of career breaks, with the burden of caring for children, as well as for older members of the family often falling on women. This fundamentally affects a woman’s career trajectory, income, and subsequent pension contributions.
Investment and Savings Habits
The latest Scottish Widows Women & Retirement report indicates that while women are engaged, they often prioritise immediate financial concerns over long-term security. Women are just as likely as men to invest via a workplace pension but are significantly less likely to invest in all other products. They often prefer to build savings first and are less likely to see themselves as an investor.
In terms of savings, women are more likely than men to prioritise emergency savings, with 71% setting a clear target of at least £1,000 for their ‘rainy-day’ fund (compared to 59% of men). Despite this careful goal-setting, women report having less in emergency savings than men. Therefore supporting women to build larger cushions from strong day-to-day savings habits would significantly strengthen their resilience. Among self-employed women, saving for emergencies is more common, and they are more likely to hold buffers above £10,000, demonstrating that there is a need for targeted, long-term financial support.
Career Breaks: The Key Driver of Inequality
Career breaks are a significant contributor to financial inequality, creating long-term financial uncertainty.
Half (50%) of all women have taken a career break, compared with only one in five men (20%). The duration can be significant, with around one-quarter of women over 55 having spent five years or more out of the workforce. Worryingly, 40% of women who took a break did not plan financially in preparation, compared to 30% of men.
The financial strain is exacerbated among women experiencing menopause or perimenopause (the transitional phase leading up to menopause). This group reports slightly higher financial strain and is more likely to say they need to work for longer as a result of their career break. Specifically:
- 44% mention they worry about the impact of their career breaks on their retirement income (vs. 42% who do not currently report any type of menopause)
- 57% mention the loss of earnings was a financial struggle at the time of their career break (vs. 56% who do not currently report any type of menopause).
Conclusion: The Way Forward
It is encouraging that women appear acutely aware of the likely financial impact that career breaks will have at any stage of their career. While some may consider this awareness a source of frustration, it presents an opportunity.
By being proactive in their outreach to both potential and existing female clients, advisers hold the power to empower women with greater confidence in their planning. This provides the necessary reassurance that taking a career break, while impacting immediate finances, does not have to come with a permanent financial penalty, and should not throw long-term goals off course.
Advisers need to be more proactive in using tools and targeted guidance, helping women create more secure futures and ultimately resolve the multi-stage uncertainty surrounding their retirement.
Find out more
Read the full whitepaper (PDF, 667KB) and watch our vodcast hosted by Susan Hope, Business Development Director, Scottish Widows, featuring Holly Mackay (Founder and MD, Boring Money), Dr Ylva Baekström (Senior Lecturer, Finance, King’s Business School) and Sam Secomb FPFS (Chartered Financial Planner, Director at Pentins and Women’s Wealth) where they share actionable tips financial advisers can implement into their practice.
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