Official Statistics

Background information and methodology: Gender Pensions Gap in Private Pensions

Published 5 June 2023

Applies to England, Scotland and Wales

Context of the statistics

A priority for the Department for Work and Pensions is to improve people’s quality of life, by addressing poverty through increased financial resilience. Automatic Enrolment (AE) and the new State Pension have been instrumental in increasing financial resilience in later life. These policies have addressed inequalities in pension provision, especially with regards to gender differences. However, private pension wealth is not equally distributed between the genders. Women have less private pension wealth on average, compared to men. This publication defines, estimates, and contextualises the Gender Pensions Gap (GPeG) in Great Britain to support efforts towards closing the gap.

Find out more information on Automatic Enrolment, Workplace Pensions and State Pension.

Purpose of the statistics

The aim of this publication is to provide a definition and estimation of the Gender Pensions Gap, as well as to provide context to understand this complex issue. This publication compliments releases by the Office for National Statistics and the Department for Work and Pensions on pension wealth and pension participation and savings trends.

These statistics:

• inform about the current and past size of the Gender Pensions Gap among those who hold uncrystallised private pension wealth in Great Britain

• support conversations around the Gender Pensions Gap by providing a definition, estimation, and context

These statistics do not:

• inform about the size of the Gender Pensions Gap among everyone (regardless of availability of private pension wealth) in Great Britain

• consider the Gender Pensions Gap across the entire pensions system as it does not consider State Pension and supporting pensioner benefits

• estimate the complete pension wealth of the population as it also excludes other financial assets and properties. These can, but might not necessarily, be used as a source of income in retirement

Source of the statistics

This release draws on 2 different data sources:

• the Wealth and Assets Survey (WAS)
• the Annual Survey of Hours and Earnings (ASHE)

The Wealth and Assets Survey (WAS)

The Wealth and Assets Survey (WAS), a biennial longitudinal survey of Great Britain conducted by the Office for National Statistics (ONS), covering sources of wealth, including but not limited to Private Pensions. This survey, in the latest round between 2018 and 2020 (7), included 17,500 households.

WAS has been chosen as a reliable, national statistic which enables monitoring of changes in pension wealth due to its longitudinal character.

Read the background information on this data source in the WAS Quality and Methodology Information.

Annual Survey of Hours and Earnings (ASHE)

The Annual Survey of Hours and Earnings (ASHE) is conducted by the Office for National Statistics (ONS) and is a key source of information on workplace pensions in GB as it collects information on all types of workplace pension: occupational pension schemes, group personal pensions and group stakeholder pensions.

The survey results are used widely in order to analyse pension participation and to monitor the impacts of pension reforms.

Read the background information on this data source in the Annual Survey of Hours and Earnings (ASHE) methodology and guidance.

Limitations of the statistics

Data sources

Wealth and Assets Survey (WAS):

• WAS is a longitudinal survey and measures assets, debt, and savings. It also covers attitudes to savings and indebtedness

• the ONS provides more information on WAS here Quality and Methodology Information

• non-sampling errors may occur in a sample survey or a census. The main sources of non-sampling error are:

  • response errors resulting from misleading questions, interviewer bias or respondent misreporting
  • bias resulting from non-response, as the characteristics of non-responding persons may differ from responding persons
  • data input errors or systematic mistakes in processing the data

• a sampling error refers to the difference between the results obtained from the sample and the results that would be obtained if the entire population was fully enumerated

• in April 2016, the periodicity moved to align with the financial year to be integrated more easily with other surveys. The analysis has taken necessary steps to ensure consistency of the measures between waves and rounds

• the impact of the pandemic on the overall response rate was minimal

Annual Survey of Hours and Earnings (ASHE):

• ASHE is based on a 1 per cent sample of employee jobs taken from HMRC PAYE records. Information is obtained from employers and treated confidentially. ASHE does not cover the self-employed nor does it cover employees not paid during the reference period

• the 2021 ASHE data has a reference date of the week containing 21st April 2021

• ASHE collects information on employee membership of the current employer’s workplace pension scheme. This does not include preserved rights in any former employer’s pension scheme or pensions paid by former employers

• ASHE collects information from employers on employee jobs, although they are referred to in this Official Statistic as ‘employees’

• the overall level of uncertainty arising from the sample size of ASHE is low, however uncertainty may be higher for particular subgroups

• for further information on ASHE please see the Background notes section on the ONS website

• prior to the coronavirus (COVID-19) pandemic, the achieved sample size for ASHE was approximately 180,000 each year. However, given the challenges to data collection during the coronavirus pandemic and response rates not recovering, the final achieved sample size was 144,000 for 2020 and 140,000 for 2021. As such, ASHE estimates for 2020 and 2021 are subject to more uncertainty than usual

Exclusions from these statistics

The following groups are excluded from the estimation of the Gender Pensions Gap determined from the Wealth and Assets Survey:

• those aged below 16

• those between the age 16 and 18 in full-time education

• those who have fully crystallised their pension wealth

• those who hold no private pension wealth

Comparison between the statistics

The Office for National Statistics releases information on pension wealth in Great Britain using the Wealth and Assets Survey. Read the latest release of Saving for retirement in Great Britain – Office for National Statistics.

The Department for Work and Pensions releases information on participation and contribution rates to workplace pensions in Great Britain. Read the latest release of Workplace pension participation and savings trends of eligible employees: 2009 to 2021.

Definitions and terminology within the statistics

The Gender Pensions Gap in this publication is defined as:

• the percentage difference in uncrystallised non-zero median private pension wealth between men and women around the normal minimum pension age

Uncrystallised pension wealth

Uncrystallised pension wealth is pension wealth not in payment, for example, active or preserved.

Non-zero private pension wealth

This publication only considers those who hold some private pension wealth, for example, non-zero private pension wealth. The largest group of people without any private pension wealth are those who are economically inactive, including: students, those looking after the family/home, those temporarily sick or injured, those long-term sick or disabled, those retired, those with other reasons. These individuals are not in a comparable position to accrue private pension wealth. This approach is in line with other statistics relevant for public policy. For example, unemployment statistics exclude those who are economically inactive and are therefore not seeking work. Besides economic inactivity, full-time education is another example of why an individual might not hold any private pension wealth.

Median

The median is the value splitting a distribution leaving half the cases below and half above the median value. The median is used for distributions that are heavily skewed, such as income or wealth, to avoid very low/high numbers having a large impact on the measure.

Normal minimum pension age

Normal minimum pension age is the earliest age at which one can access their pension. When introduced in 2006 it was set at age 50, in 2010 it increased to age 55. When this publication refers to the GPeG around normal minimum pension age the age band 55-59 is used for Rounds 6 and 7 and Waves 3, 4, and 5. The age band 50-54 is used for Waves 1 and 2. These five-year bands are chosen to ensure a balance between granularity and a sufficiently large enough sample size in WAS.

Pension wealth

Pension wealth reflects the outcome of pension accumulation at a given age band. Considering pension wealth means that we are estimating the Gender Pensions Gap based on available wealth, not on the income drawn down as pension income.

Automatic Enrolment (AE)

Automatic Enrolment (AE) was introduced in 2012 to help address the decline in private pension saving and to make long-term saving the norm. AE mandates employers to provide a workplace pension for all workers meeting all of the following criteria:

• working in the UK; earning more than the earnings threshold (currently £10,000 a year)
• are aged between 22 years and State Pension age (SPa)
• are not already enrolled in a qualifying workplace pension

The analysis includes employees already a member of a workplace pension scheme when AE was introduced.

About the statistical techniques

Variables

When estimating uncrystallised private pension wealth, in line with ONS estimations, this analysis considers:

• total value of defined benefit occupational scheme

• total value of current defined contribution pension wealth

• total value of additional voluntary contribution (AVC) schemes

• total value of personal pension scheme

• total value of retained rights in Defined Benefit (DB) scheme. In Round 7 of WAS, it is possible to distinguish between retained rights in DB schemes that have been partially accessed while leaving some uncrystallised wealth and retained rights in DB schemes that have not been accessed at all. This analysis includes both, which is consistent with the full value of retained rights in DB schemes used in previous rounds and waves of WAS

• total value of retained rights in Defined Contribution (DC) scheme. In Round 7 of WAS, it is possible to distinguish between retained rights in DC schemes that have been partially accessed while leaving some uncrystallised wealth and retained rights in DC schemes that have not been accessed at all. This analysis includes both, which is consistent with the full value of retained rights in DC schemes used in previous rounds and waves of WAS

Throughout, when available, imputed variables are used for improved accuracy.

When assessing AE eligibility, this analysis considers respondents’ individual responses at the time of interview. Whether the AE eligible respondents are in fact enrolled in their workplace pension scheme is not being considered. As AE eligible defined are respondents who:

• are employees (e.g., not self-employed)

• have an annual gross pay higher than the earnings trigger at the time

• are aged being between 22 and the relevant State Pension age

The 3-month average year-on-year percentage change in Average Weekly Earnings (AWE) taken in September of each year is used to deflate the trigger value to estimate the earnings trigger pre-2012.

Weighting

This analysis uses the respective wave/round household weight in line with ONS methodology.

Rounding

This analysis reports figures rounded to the nearest £1,000 and percentage point.

Revisions to the statistics

DWP are reviewing these statistics as part of the department’s ongoing statistical work programme. DWP is committed to regular reporting of these statistics and will seek views on the appropriate frequency with which to publish revisions as new data becomes available.

Status of the statistics

Official statistics

This release is classed as official statistics, according to the Code of Practice. This means that this release applies the three pillars as defined in the code:

• trustworthiness
• quality
• value

Quality Statement

All data sources used in this publication have undergone detailed quality assurance processes. DWP analysts have quality assured the analysis and presentation of the findings in this publication.

The ONS has their own measures in place to assure the quality of WAS and ASHE data. In addition, we monitor any developments regarding the pension variables within these surveys.

Feedback

We welcome feedback

We are committed to improving the statistics we publish and would welcome any views you have.

Contact us for statistical enquiries and publication feedback only, email: workplacepensions.statistics@dwp.gov.uk

Press enquiries should be directed to the DWP Press Office, telephone: 0203 267 5144

Useful links

ONS publication: Saving for retirement in Great Britain

DWP publication: Workplace pension participation and savings trends of eligible employees: 2009 to 2021