I’ll be upfront: I’m not the one building cashflow models or picking apart suitability files. That’s the rest of the team. But after sharing Cecilia Furner’s piece on better retirement outcomes for women yesterday, I ended up going down a bit of a rabbit hole with the research, and one thing stood out almost immediately.

The gender pension gap is usually talked about as a retirement problem. Something that becomes obvious at 60, when somebody suddenly realises their pension looks very different from their partner’s. By that point, though, there’s often not a huge amount of time left to change the outcome, which makes the more useful question when the warning signs actually start appearing.

And I’ll admit, some of the ages in the research made this feel a bit more personal than I expected.

I’m 41, I have three children and I’ve got a career that I genuinely love and really value. But it has taken time to get here. Like a lot of families, there have been periods where decisions around work, children, childcare and what made sense financially had to be made as a household. My husband’s income has done more of the heavy lifting financially at different points, and that doesn’t mean my career has mattered any less to me. It just means our working lives haven’t followed exactly the same path.

That is probably why the research around when the pension gap starts to develop caught my attention.

AJ Bell’s research points to age 28 as one of the first places pension priorities begin to diverge. Before then, pensions barely register as a high financial priority for either men or women, with just 6% of women and 9% of men ranking them that way. It’s a small difference at that stage, but it’s interesting because it’s happening years before most people would consider themselves to be doing any serious retirement planning.

The bigger shift seems to come later. Professional Paraplanner reported on Aviva research covering more than five million pension plans, which found the gap widening from 21% in the late thirties to 32% by the early fifties. Aviva pointed to age 35 as a particularly important point, not because something suddenly happens on somebody’s 35th birthday, but because that tends to coincide with the years when career breaks, reduced hours and caring responsibilities become much more common.

That age really resonated with me. Your thirties can be such a busy period of life that I’m not sure many people are stopping to think about the impact a decision today might have on their pension 25 or 30 years later. You’re thinking about nursery bills, school runs, mortgages, whether somebody needs to finish early on a Wednesday and who has the job with a bit more flexibility. Pension compounding is probably not top of the WhatsApp conversation.

By age 60 to 65, women’s pension pots average around 57% of men’s. That’s a pretty big gap to discover when retirement is already on the doorstep.

 

Career breaks are a big part of the picture

This isn’t simply about women choosing to put less into a pension. A lot of the difference comes from what happens around work. Women are much more likely to take time away from employment for childcare, reduce their hours or step back from progression for a period, and those are exactly the years when missed contributions have the longest time to matter.

One estimate suggests a five-year career break beginning at 35 could reduce someone’s pension by around £69,000 by retirement. That was the part that really jumped out at me. Missing contributions then doesn’t just mean missing the money that would have gone in, it also means losing years of potential growth on those contributions.

I also think the language around this matters. “Career break” can make it sound as though somebody simply decided to put their career on hold. Real life is usually much messier than that. It might be maternity leave followed by reduced hours because childcare costs are enormous. It might be choosing the job that works around school rather than the one that offers the next promotion. It might simply make more financial sense for one person’s career to take priority for a few years.

None of those things necessarily feels like a big pension decision at the time. Usually, they just feel like normal family decisions.

And I think that’s part of the problem. The pension impact is happening quietly in the background.

 

Some of the things that can help are surprisingly simple

Reading through the research, I kept thinking that some of this is information people could really do with much earlier. A non-earning partner can still have up to £3,600 gross paid into a pension each tax year, including basic-rate tax relief. Child Benefit can also protect National Insurance records and therefore State Pension entitlement, provided the claim is made correctly.

There are other small things worth checking too, like what actually happens to workplace pension contributions during parental leave rather than simply assuming they stop. None of these things fixes the gender pension gap on its own, but over 20 or 30 years, small decisions can make a meaningful difference.

And I wonder how many women would make different decisions if somebody simply pointed these things out at the right time.

I certainly don’t remember sitting in my twenties thinking about whether the choices I would make around work and family in my thirties might eventually affect my retirement income. I was thinking about building a career and paying the bills in front of me. I suspect I’m not particularly unusual in that.

 

Where this becomes an advice issue

This is probably the bit that interests me most from a We Complement point of view. The gender pension gap isn’t really a separate issue that suddenly needs discussing with women at retirement. It’s something that can show up much earlier in ordinary retirement planning.

If somebody has had a career break, moved to part-time hours or spent several years making lower contributions, has that actually been reflected in the cashflow modelling? If one partner’s pension is significantly smaller than the other’s, does the plan recognise why? And if a couple are being advised together, is it still clear what each of them owns and what their individual retirement position looks like?

 

That last point feels particularly important to me.

As somebody who is married, I naturally think about our finances as ours. We’re a household and we make decisions as a household. But that doesn’t change the fact that we are also two individuals, with two careers, two pension histories and potentially two very different retirement positions.

Looking at household pension wealth as one big number can make a plan look perfectly comfortable while hiding a very different picture for the two people sitting in the room. That might never become an issue, but divorce, bereavement or simply wanting to understand your own financial position can suddenly make the distinction quite important.

And I don’t think recognising that somehow undermines joint financial planning. If anything, it makes it better.

 

The file should tell the story too

This is where the paraplanning and suitability side comes in. A good retirement recommendation shouldn’t just show where the client is now. The reasoning behind it should also make sense in the context of how they got there.

Career breaks, reduced earnings, gaps in contributions, changes in working patterns and different levels of pension provision between partners are all part of the client’s financial history. If they’re relevant to the recommendation, they should be visible in the thinking behind the advice rather than simply sitting quietly in the fact find.

We see plenty of cases where two clients look quite similar at first glance. Same age, similar retirement date, similar objectives. But once you understand the years that came before, the planning needs can look very different.

And perhaps that is where advisers can make the biggest difference. Not by telling somebody at 60 that there’s a gender pension gap, but by noticing the things that could create one while there is still time to influence the outcome.

 

Maybe 35 is the age worth remembering

I don’t think advisers need to suddenly start having a separate “gender pension gap conversation” with every female client. But I do think there’s something useful in the ages the research keeps pointing towards.

If the gap is beginning to emerge in someone’s late twenties and then widening more noticeably through their thirties and forties, those are the years when there is still plenty of time to do something about it. Waiting until 60 to spot it feels a little late.

And perhaps this is the bit I see differently now that I’m 41.

At 28, retirement felt miles away. At 35, life was busy. Now, at 41, my eldest has finished school and I can look back and see how lots of perfectly ordinary decisions made over those years could shape what someone’s finances eventually look like.

So perhaps the useful question at review isn’t simply “How much is in the pension?”

pension?”

It’s “What has happened since we last looked at the plan, and has that changed where this client is heading?”

Because the gender pension gap may become most visible at retirement, but the decisions that help create it are often made decades earlier, usually while people are thinking about everything except their pension.

And that, for me, was the biggest thing I took from the research.