Workplace Wellbeing: Are you saving enough for your retirement? 

A distinct gender gap in Ireland exists when it comes to pensions, and it’s vital that women take a proactive approach to investing in their future security

The Irish financial advisors Ask Acorn recently revealed that the average pension pot of an Irish woman aged 55 or older amounted to €82,674, some 43% less than the €144,716 saved by Irish men of the same age.

ANA Novak is worried about her financial future. The 32-year-old web editor from Slovenia lives in Dublin and she is anxious about what her prospects will be in retirement.

“I’ve heard that there is a pension gap for women and I know that there were years where all I focused on was paying the rent and day-to-day expenses,” she says. “Saving for the future just didn’t seem possible.”

She isn’t the only one feeling uncertain. According to the Retirement Pulse Survey published by Standard Life in 2024, half of women believe they are financially unprepared for retirement and 56% experience anxiety when they think about it.

These aren’t the only alarming statistics. The Irish financial advisors Ask Acorn recently revealed that the average pension pot of an Irish woman aged 55 or older amounted to €82,674, some 43% less than the €144,716 saved by Irish men of the same age.

Perhaps most troublingly, a higher proportion of women than men have no pension at all to draw on in retirement, other than the €289.30 paid weekly by the State. Standard Life’s survey found that 27% of women are in this position compared with 17% of men.

Laura Farrell, the CEO of the Retirement Planning Council of Ireland, identifies three contributing factors to what she sees as “the deeply concerning fact that women in Ireland are at a significant disadvantage when it comes to retirement preparedness”.

Because women have traditionally been over-represented in low-paying sectors such as retail and hospitality and under-represented in senior management and leadership, they have earned less than men. As Farrell explains, lower pay “translates into lower pension contributions over a lifetime”.

The financial impact of being the primary caregiver in the family is also significant: “Seventy-one per cent of female respondents to a survey we carried out recently had taken a career break and 94% cited childcare as their reason for doing so,” says Farrell. “A 2024 Irish Life report showed that women in Ireland spend an average of six years out of the workforce. Those are years of lost income, lost pension contributions, and lost investment growth.”

There is also a tendency for women to take on part-time or lower-paid roles when they do return to work. This creates what Farrell calls “a double penalty — a break in contributions followed by a reduced capacity to contribute upon returning to work”.

Laura Farrell, the CEO of the Retirement Planning Council of Ireland, identifies three contributing factors to what she sees as “the deeply concerning fact that women in Ireland are at a significant disadvantage when it comes to retirement preparedness”.

Financial inequalities

Ursula Barry, associate professor emeritus in gender studies at University College Dublin, points out that there are also historical and cultural issues at play.

“Women who are retired or approaching retirement in Ireland today grew up in a time of the marriage bar,” she says. “It was in place until 1973 and meant that women in certain sectors of the economy had to leave the workforce once they married. They immediately became financially dependent on their husbands.”

Could the impact of that dependence still be being felt today? Barry says it might help explain why Standard Life’s survey found that 42% of women feel uncomfortable talking about money. Or why 24% of women who have pensions in place didn’t know how much was in it, compared with 19% of men who said the same.

“Until relatively recently, women in Ireland weren’t raised to be proactive about their money,” says Barry. “Combine this with the fact that women are often the lower-income earner, which makes them the financially subordinate partner in a relationship, and this inequality might explain why many lack confidence when it comes to preparing for retirement.”

Whatever the reasons for this financial unpreparedness, Farrell worries about its consequences. The most immediate of these is a greater reliance on the state pension.

“Our survey revealed that 68% of women expect to be heavily reliant on the state pension compared to just 32% of men,” she says. “While the state pension provides a crucial safety net, it may not be sufficient to maintain a comfortable standard of living, especially when you consider that women have a longer life expectancy, living to over 84 on average. Their retirement could last for 20 years or more, and their smaller private pension pot [if they have one] has to stretch further.”

Financial precarity could force women to continue working past retirement. “We found that 60% of women would consider working past the age of 65, compared to 40% of men,” says Farrell. “For many, this won’t be a choice but a necessity and one that means less time for leisure, family and community and the potential for increased stress and health issues in later life.”

Ana Novak is worried about her financial future. The 32-year-old web editor from Slovenia lives in Dublin and she is anxious about what her prospects will be in retirement.

Engage with your finances

Being made aware of the need to start an early pension plan is why Novak began to be more proactive about her retirement a couple of years ago. 

“Hearing about the pension gap for women made me worry that I would fall behind if I didn’t act,” she says. “So now I’m trying to make up for lost time.”

Her employer contributes through a workplace pension scheme, and she adds extra when she can. 

“I would like to have children in the future and expect I will take some time out from work to spend with them,” she says. “I know that is bound to affect my pension savings, and I don’t believe the state pension will be enough on its own. So I feel it’s important I set aside as much money as I can now.”

The story of women’s pensions isn’t all doom and gloom. Barry says there are positive signs.

“Women currently make up the majority of those in third-level education, and this should lead to them getting better-paid jobs,” she says. 

“Employers are also encouraging women to remain in the workforce for longer. Both of these developments should narrow the gender pay gap.”

The Gender Pay Gap Information Act 2021 should help too. As of June of this year, employers with 50 or more employees have to publish gender pay gap reports.

“This will give women data on the different salaries paid to men and women, which should provide them with more ammunition to bring to the table in pay negotiations,” says Barry.

Barry also has high hopes for the auto-enrolment scheme, which involves everyone who earns more than €20,000 a year being automatically included in a pension scheme other than the one offered by the State.

“Even though there will still be a two-tier system between those on higher and lower levels of pension payments, that gap should narrow,” she says.

However, more could be done. Farrell would like employers to enhance their family leave policies. “More progressive paternity leave would encourage more equal sharing of care-giving responsibilities,” she says. “And companies continuing to make pension payments for women on maternity leave would help mitigate the damage of career breaks.”

Barry believes an overhaul of the childcare system would make a big difference, arguing that “if Ireland had a comprehensive public childcare system, many of the issues surrounding women and career breaks and the resulting inequalities in income and pensions would disappear”.

Women can also take matters into their own hands.

“There are proactive steps they can and should take to gain control of their financial futures,” says Farrell.

She recommends women start by engaging with their finances to find out where they are in relation to where they want to be.

She also advises women to set aside money consistently because “even small regular contributions can grow into a substantial sum over time”.

Remaining engaged is essential. “Don’t just set up a pension and then forget it,” she says. “Use the digital tools your pension provider offers. Understand your investment options. And consider making additional voluntary contributions if you can afford to. A small increase can make a big difference over the long term.”

Finally, she advises getting professional help.

“The world of pensions can be complex, but you don’t have to navigate it alone,” says Farrell.

“Investing in financial advice is investing in your long-term financial security. Future you will thank you for it.”

• Visit rpc.ie for more information