06 November 2025
3 min
Associate Governance, Administration and Projects Consultant
Reporting on the Gender Pensions Gap (GPG) is set to become mandatory in the LGPS. The recent Access & Fairness consultation proposes the publication of results in each valuation cycle in England & Wales.
Across the UK, gaps exist in the level of pension accrued over a working life by female members versus their male counterparts. But we’re not alone. The average GPG is 29% across the EU, with individual results varying from as little as 2% in Estonia to a high of 44% in Luxembourg.
To support our LGPS members, what can we learn from countries that have successfully reduced their GPG, and from those that still have work to do?
This article explores how work patterns and employment decisions, financial literacy and persistent gender norms shape the pensions gap - and what LGPS funds and employers can consider to drive change.
One of the countries with a persistently high GPG of above 40% is the Netherlands.
As in all countries with a GPG, the reasons behind the Netherlands’ gap are wide ranging and complex. Notably, the Netherlands’ high pensions gap contrasts with a gender pay gap in line with the EU average, showing that income alone does not explain the disparity.
One Dutch study found that women place higher importance on work that is considered ‘meaningful’ and another found evidence that women value ‘amenities’ such as hybrid working and flexible working patterns over income.
By contrast, Iceland’s small GPG of 5% could be linked to universal, heavily subsidised childcare and high female participation in the labour market, sitting at 80% compared to 57.3% in the UK. Access to childcare and flexible working options are key factors enabling women to build better pension outcomes.
The European Insurance and Occupational Pensions Authority (EIOPA) emphasises that a key step in addressing the GPG is the provision of appropriate childcare by local authorities. It’s therefore a promising step that the LGPS may be one of the forerunners when it comes to assessing and reporting on the GPG, as some mitigations have the potential to be considered at a local level.
With 73% of the LGPS’ membership made up of women, it’s reasonable to assume that members with children may choose roles that allow flexi-time, enhanced holiday accrual packages, term-time working patterns and the ability to more easily juggle work alongside childcare requirements.
Denmark has one of the highest levels of financial literacy in the world. Subsequently, it demonstrates higher levels of both individual saving and engagement with pension investment strategies.
An emphasis on financial literacy can give women confidence to take the steps required to supplement their pensions. Denmark has attained such high rates of financial literacy through mandatory money management lessons introduced from age 13.
The UK Government is considering its approach to financial education. In a private sector Defined Contribution (DC) scheme - while the option to increase member contributions is relatively straightforward - it can still feel inaccessible to some women who have, or perceive themselves to have, a lower level of financial literacy and are therefore less likely to engage with financial planning. And in the case of the LGPS - where additional benefits can only be secured by a third party Additional Voluntary Contributions (AVC) provider - the level of knowledge and understanding required to set up such an arrangement may be off-putting.
It's worth noting that meaningful improvements as a result of State investment in financial education would likely be seen over generations rather than benefiting the current female workforce.
Employers in the LGPS could therefore take steps to help mitigate the GPG through improved and targeted communications. These would help women to understand their options - particularly around the use of AVCs as an additional savings vehicle - and better consider different arrangements that may serve their personal financial needs.
It’s widely understood that historic societal structures influence the GPG. Gender norms remain. Traditionally men are considered the ‘breadwinners’ and women stay at home or work part time to provide childcare.
A 2019 study of German citizens found that 65% of females aged between 12-25 would like to work part-time when considering raising a child. Similarly, 68% of young men would also like their partner to work part time or otherwise scale back their employment when starting a family.
Although fathers in Germany can take parental leave of up to 36 months, uptake is low. This is mirrored in the low uptake of Shared Parental Leave (SPL) in the UK. It’s currently taken up by only 1% of eligible mothers and 5% of eligible fathers. Recommendations to improve the uptake of shared parental leave amongst men include greater promotion of SPL by employers and raising awareness amongst employees.
Across Europe, the participation of women in the labour market is gradually increasing, as are more family-friendly working policies. However, challenges remain, and we shouldn’t take these changes as indicators of a ‘job done’, but rather a shift in the right direction.
With GPG reporting likely to become mandatory in the LGPS, funds and employers are in a great position to support the female workforce. By understanding the gap that exists, employer teams can explore the underlying issues holistically. From there, we can work together to think about how to improve things for members as they move through their careers and into retirement.
If you have any questions on anything covered in this blog or on pensions adequacy more generally, please get in touch.
Pensions adequacy: the Gender Pensions Gap in the LGPS
Falling into a retirement adequacy crisis
The impact of social and behavioural aspects on the gender pension gap in Europe - EIOPA
Mind the Gap: Understanding the Gender Pension Gap in the Netherlands | Leiden International Centre
The gender pay gap in the Netherlands | European Commission
The Gender Gap in Meaningful Work
Job Amenities and the Gender Pension Gap
Gender-equal pensions in the Nordics | Nordic Council of Ministers
Gender Equality in Iceland – IMF Finance & Development Magazine | March 2019
United Kingdom | World Bank Gender Data Portal
LGPS Scheme Advisory Board - Membership profile (GAD data)
Financial Literacy and Inclusive Growth in the European Union | Policy Contributions 2018
Shared Parental Leave Evaluation report | Department for Business and Trade
Women's situation in the labour market | European Commission
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