On average, women in Europe have 12.7% lower wages than men. Moreover, they have a 35% higher risk of poverty. This disparity only grows during their working years, considerably affecting their retirement savings and pension benefits. To the extent that, according to the latest Eurobarometer survey (as reported by Eiopa), only 37% of women are confident in living comfortably in retirement. 47% of men do. Rightly so, since, on average, they will usually be able to count on pensions that are 30% lower than their male colleagues, partners, brothers, and friends. 

A further evidence, if we needed another one, that on all things money, many fall behind because of their sex. As evidence shows, they are affected way, way before they even enter the labour market.   

According to NOW:Pensions, a pension provider in the UK, women need to work an extra 19 years to retire with amounts equal to men. In other words, to achieve the same levels at the same time, girls would have to start saving by the age of three. That is because, by their late 50s, they will have built up 62% of men’s pension wealth. Generally, women retire with “resources” of 69,000 £, while men’s pension savings can reach 205,000 £.

Pension gaps in Europe

On the island, PensionBee reported, “Despite the rise in the value of pension pots, the gender pension gap remained persistent across all regions, with women in Ireland facing the largest pension gap at 44 per cent.” However, these numbers are not characteristic only cross-Channel. They aren’t, in fact, too dissimilar to those recorded in most countries throughout the EU.

Earlier in May, Eige’s report Financial Independence and Gender Equality highlighted that “The EU gender pension gap of 26% reflects the impact of lifetime cumulative factors, such as inequalities in working hours and time out of the labour market, labour market segregation and the role of pension policies.” Factors contributing to the picture drawn by Eurostat’s. For women above 65, the gender pension gap in 2019 reached 29%, with Luxemburg and the Netherlands accounting for the worst difference among the 27 member States (respectively 44.2% and 39.7%.) 

Among the most populous countries in Europe, Germany occupied the sixth place. There, the Federal Statistical Office published data last month recording a gender pension gap of 27.1%, confirming that one in five women (20.8%) aged 65 or above were at risk of poverty in 2023, compared to 15.9% of same-aged men.

In Italy, according to INPS, women’s pensions, on average, amount to 60% of those received by men. For only 45% of them, income from retirement is the result of past work activity (it is for 70% of men.) If women accounted for 52% of the 16.1 million retirees in 2022, they received only 44% of pensions of that year for a median amount that was 36% lower than the average male received.**

Setbacks due to care needs

Today’s women are better educated and can potentially access better-paying jobs than before. The gender pay gap has dropped somewhat—even if slightly and slowly. Yet during their working lives, they confront a variety of setbacks and stops related specifically to caregiving needs – from maternity-related leaves to time off to care for old or sick family members, which they disproportionately still shoulder. In the long run, those stops affect their ability to live comfortably and with higher levels of independence later in life.

Considering that we can expect to live longer today and that women typically live longer than men, we can assume that the number of female retirees at risk of poverty or social exclusion will increase. Without intervention or adjustments, it will grow even further than the 22.7% recorded in 2022.  

One good news is that—likely thanks also to gender equality and equal rights having become fast-growing concerns on an international level and entering economic calculations and growth prospects—someone is taking notice. And, at least in one case (namely Luxemburg), some national-level plans are trying to counterbalance current inequalities. 

Even with the highest average salary in the continent (47 €/hour) and the highest GDP in the world, the Great Duchy has the highest gender pension gap in the EU. To tackle the problem, the country has introduced the so-called “baby years pension scheme”, permitting parents to cover up to 4 years of pension insurance. According to the National Pension Fund, this means a 24-month insurance period “which recognises the parent who devotes themselves to the care or education of a child.” 

The plan, interestingly and importantly under many gender equality perspectives, adds significant value to the concept of caring parent. Moreover, it aims to ensure that the limit created by the time taken from work to care for children becomes less detrimental to the rights to pension. That, as seen, is heavily burdensome, specifically for women.

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* Gender Pay Gap Statistics, Eurostat March 2024.

** INPS Press release, “Analisi dei divari di genere del mercato del lavoro e nel sistema previdenziale”, February 2024.

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