Gender Pension Gap at lowest level ever, Reform policies would put progress at risk

New analysis from Prospect union shows the Gender Pension Gap (the difference between men’s and women’s pension value) has fallen to its lowest ever level. However, the union argues the gap is still unacceptably high at 32.9% for the year 2023-24 – the latest for which figures are available.

Prospect was the first organisation to regularly measure the Gender Pension Gap in the UK with our report published eight years ago.

This year’s 3.6 percentage point fall is the highest Prospect has recorded but it still means women pensioners earn on average £7,200 less annually than their male counterparts.

Some reasons for the continuing downward trend include:

• The reduction in the size of the gender pay gap due to various policies and social and labour market trends over past decades.
• Greater female participation in the workforce over past decades.
• Greater female participation in pension schemes (relative to male participation – particularly driven by part-time workers) over past decades.
• Increased state pension entitlement for women (relative to men – driven by the introduction of HRP and, much later, the new state pension) over past decades.
• Relatively high levels of women enrolled in Defined Benefit schemes compared to men, especially in the public sector

Certain pension schemes have taken proactive steps to reduce their gender gaps in recent years. Some of the most effective incoming changes are those implemented by the Local Government PensionScheme which came into effect from April 2026. Prospect has called on the government to adopt the measures across other public sector schemes. The changes include:

1. Making authorised unpaid absences of periods under 15 days automatically pensionable.
2. Extend the time limit for buying back pensionable service in respect of authorised unpaid leave of 15 days or more.
3. Make unpaid additional parental leave automatically pensionable (with the cost met by employers).

The government recently replied to a letter from Prospect and stated that Government Actuary’s Department would look into the changes proposed to see if they might be applied to the Civil Service Pension Scheme.

Sue Ferns OBE, Senior Deputy General Secretary of Prospect, said:

“The continuing reduction in the Gender Pension Gap is welcome. However, there is still a shortfall of £7,200 a year in income for an average retired woman compared to an average retired man.

“Progress remains far too slow, and it is of particular concern that the gaps in some public sector pension schemes are even worse than the average.

“It is however particularly encouraging that some, like the LGPS, are actively bringing in measures to address the problem. The government’s agreement to assess these measures for other schemes is a huge step in the right direction and others should follow their example.

“We cannot become complacent that things will continue to improve. There is a real political threat from those who wrongly characterise this cost-of-living issue as part of the so-called culture wars, and who would seek to shut down public sector schemes to new entrants. If carried out this could reverse all recent progress, leaving millions of people worse off.”