Third of retirement incomes are below the minimum standard of living

Scottish Widows research suggests that approximately one-third of women and 30% of men could face retirement incomes below the minimum standard of living.

Based on a YouGov survey of more than 5,200 adults, the research identifies minimum annual income thresholds of £13,900 for individuals and £22,500 for couples.

The findings highlight continued concerns about pension adequacy and the ability of households to maintain financial security in later life. Although the implications are primarily long-term, retirement expectations can also influence current saving and spending decisions.

Women’s median projected retirement income has risen to £14,500 a year, up £1,500 on 2025 projections. While this remains below men’s £18,300, the increase marks encouraging progress towards greater gender equality in retirement.

The disparity between men’s and women’s projected annual retirement income has also narrowed from £6,000 in 2025 to £3,800 today. This reflects narrowing gender pay differences, higher State Pension entitlement and growth in women’s other savings.

Women’s retirement prospects remain mixed. Just over a quarter (27%) are on track for a comfortable retirement. A third (33%) risk retirement poverty, which equates to less than £13,900 a year for a single person or £22,500 for a two-person household*.

Jill Henderson, Retirement Expert at Scottish Widows, said “The fact that the gender pension gap is at its narrowest point since the National Retirement Forecast began is proof that progress is possible. More women than ever are building towards genuine financial resilience in later life.

“Change must happen faster. Too many women face a retirement of financial hardship, with life events such as unpaid caring responsibilities, menopause and relationship breakdowns disrupting their ability to save. Understanding how long-term savings are tracking is essential to helping women stay financially secure.”

Analysis of Lloyds Banking Group and Scottish Widows’ own customer data reveals that young women face disadvantages early in their careers, one in seven (14%) women under 30 earn below the £10,000 automatic enrolment threshold, compared with 9% of men, potentially missing out on employer contributions and valuable early investment growth.

Among 22-25-year-olds with a Scottish Widows workplace pension, 71% of women contribute 10% or less of their pay, compared with 64% of men. Women are also less likely than men to contribute over 15% across every pay band.

Digital tools can help younger women understand pensions, navigate decisions and start saving early. Women aged 18-34 who find retirement tools helpful are almost twice as likely to expect to maintain their standard of living in retirement as those who use none (38% vs 19%).

Susan Hope, Retirement Expert at Scottish Widows, said“Our data shows that the pension gap takes root from a woman’s very first job. But closing it requires more than better awareness – it means fundamentally changing the systems that shape women’s financial futures.

“From pension enrolment and parental leave to support through divorce, menopause and illness, policy and workplace changes must better reflect women’s lives and help them build financial security at every stage.

“Closing the gender pension gap is no mean feat, but through collaboration, conversation and digital engagement, we can help future generations of women retire in a better position.”