Why Financial Wellbeing Education Matters for UK Employers and Their Workforce
If you run a business or work in HR, you probably already have a sense that financial stress affects your people at work. What the research is increasingly making clear is just how much — and how preventable some of it is.
The Scottish Widows Women and Retirement Report 2025 is one of the most detailed annual surveys of retirement outcomes in the UK. Its findings this year are difficult to ignore. Women in the UK are on track to retire with a median annual income of around £13,000, compared with around £19,000 for men. That 32% gender pension gap has actually widened since last year, not narrowed. For HR professionals and SME owners, the figures raise a straightforward but uncomfortable question: what role can the workplace play in helping employees make better-informed financial decisions before it’s too late?
The Scale of the Problem: What the Research Tells Us
The gender pension gap in numbers
The median private pension pot at retirement stands at £173,000 for women compared with £286,000 for men which is a gap of £113,000. Because of this, 36% of women are heading towards a retirement income below the minimum living standard, against 31% of men, and only 24% of women are on track for a comfortable retirement compared with 36% of men.
To put those thresholds in concrete terms, the Pensions and Lifetime Savings Association’s Retirement Living Standards put a minimum retirement for a single person outside London at around £13,400 a year covering basics with a little left over, but no car and one week’s holiday in the UK annually. A comfortable retirement, which allows for a three-year-old car, regular takeaways and a couple of holidays a year, requires around £43,900. The gap between where many women are heading and where they’d reasonably want to be is significant.
The motherhood penalty and its long-term cost
The report is fairly direct about what’s driving this. Career breaks, and the knock-on effects they have on pension contributions, career progression and earnings, are identified as arguably the single biggest factor. Around half of all women have taken a career break at some point in their working life, compared with only one in five men. By the age of 55, nearly one in four women has been out of the workforce for five years or more in total.
Separate research from the Office for National Statistics puts numbers on what this looks like in earnings terms. Five years after the birth of a first child, mothers’ monthly earnings are on average 42% lower than they were in the year before birth which is a total earnings loss of around £65,600 over those five years. Women are twelve times more likely than men to take a career break specifically for childcare (36% versus 3%). And yet two-fifths of women didn’t plan financially for their career break at all.
This is where the workplace comes in. When pension contributions stop during a career break, the damage isn’t just the missing contribution; it’s also the investment growth that would have built on them. The Scottish Widows report makes the point that a roughly one percentage-point increase in contributions, sustained consistently across a career, can be enough to offset the impact of a five-year break. But that only works if employees actually know it.
Health, menopause and the gaps we don’t talk about
Career breaks aren’t always planned, and they’re not always about children. The report highlights that women experiencing menopause or perimenopause report slightly greater financial strain during career breaks, are more likely to say they’ll need to work for longer as a result, and are more likely to worry about the long-term retirement impact. These are life stages that affect working patterns in real and material ways, yet they rarely come up in workplace financial planning conversations. The data suggests they probably should.
What Employers May Not Realise About Their Own Workforce
Half of women don’t think investing is for them, even though many already do it
One of the more striking things in this year’s report is the gap between how women perceive themselves financially and what they’re actually doing. Half of all women (50%) say investing isn’t for them, a figure that’s barely moved since 2024. Yet 44% of that same group hold a workplace pension, which makes them investors already. They just don’t see it that way.
This perception gap matters because employees who don’t think of themselves as investors are less likely to take active decisions that would improve their position. Men are considerably more likely to invest beyond their workplace pension — 37% hold a stocks and shares ISA compared with 26% of women. The report suggests that simply reframing investing as a natural next step after building a basic savings buffer, rather than something separate and intimidating, could make a meaningful difference to engagement.
Women plan their finances just as carefully as men but use different tools
It’s worth pushing back on the assumption that women are less financially engaged than men, because the evidence doesn’t really support it. The same proportion of men and women (81%) say they actively plan their finances, whether that’s setting budgets, tracking bills or thinking ahead to retirement. Where the difference shows up is in the use of digital planning tools: 15% of women use them for long-term savings and pension planning, compared with 21% of men. When asked what would encourage them to use these tools more, both men and women gave the same answer: clearer, simpler guidance on how they actually work.
Shared Parental Leave: available but rarely used
Shared Parental Leave allows parents to divide maternity or adoption leave between them, giving families more flexibility about who steps back from work and when. Despite being available for over a decade, uptake remains low. Around one in five women and one in four men in the survey said they’d used it, though the report notes some men may be including standard paternity leave in that figure.
Around one in five women who didn’t use SPL said it was their own choice to take all the leave themselves. A further one in five pointed to a partner who didn’t want to take additional leave, or a workplace that wasn’t supportive. This is relevant for employers because the policy is only as useful as the culture around it. When SPL is genuinely visible and normalised (not just listed in a policy document) more people use it, and the long-term impact on women’s pension contributions is measurably less severe.
What the Research Recommends for Employers
The Scottish Widows report is fairly specific about what employers can do. Rather than general wellbeing gestures, it points to actions tied to real moments in employees’ working lives.
Timing is one of the most important factors. Women are most financially vulnerable at specific points: going on maternity leave, returning from a career break, managing health changes in their forties and fifties. A general pension awareness email sent to all staff is much less likely to change behaviour than clear, relevant information delivered at the moment someone is actually facing a decision. That might mean a conversation about contribution rates when someone goes on parental leave, or a targeted communication for employees returning to work after a long absence.
Starting pension contributions earlier is another area where small changes add up significantly. Auto-enrolment currently kicks in at age 22, but the report notes that four additional years of contributions, from 18 to 22,can make a substantial difference to long-term outcomes. Where employers have the flexibility to enrol younger workers early, or at least to communicate clearly about why starting as soon as possible matters, there’s real value in doing so.
On Shared Parental Leave, the recommendation is less about policy and more about culture. The report is explicit that flexibility needs to be visible and practised as business as usual, not just available on paper. Organisations where senior staff are seen to use flexible policies create an environment where others feel they can too - and that shift in workplace culture has a direct bearing on whether the gender pension gap widens or narrows over time.
The FCA’s ‘Targeted Support’ Framework: Worth Keeping an Eye On
One regulatory development that HR professionals and business owners may want to follow is the Financial Conduct Authority’s proposed ’targeted support’ framework. The idea is to create a middle ground between generic financial information and regulated financial advice; guidance that’s specific to someone’s situation, potentially delivered through digital tools including AI, but without the cost and formality of traditional advice.
The Scottish Widows report found that 50% of women and 52% of men think this kind of support would be helpful. Among younger women, the figures are considerably higher: two-thirds of women aged 18 to 34 said targeted support would be useful to them. That makes sense because younger employees are making significant financial decisions without necessarily having the assets or complexity that would warrant a financial adviser, and they’re the most likely to engage with digital-first guidance. Employers who understand what becomes available under this framework will be better positioned to signpost employees towards it.
The Role of Financial Education in the Workplace
None of this changes the structural realities: the gender pay gap, the cost of childcare, the unequal distribution of caring responsibilities. Financial education can’t fix those things. What it can do is close the gap between the support employers already offer and the extent to which employees actually understand and benefit from it.
Most employees don’t know how their pension contributions compound over time. Many don’t know what their employer is contributing on their behalf, or what the long-term cost of opting out, or pausing contributions during a career break, actually looks like in pounds and pence. That’s not a failing on their part; it’s a reflection of how little financial education most people receive and how rarely these topics come up in the normal course of working life.
Structured, accessible learning resources can help fill that gap. Short modules that explain how pensions work, what auto-enrolment thresholds mean, how a career break affects a pension pot, and what options are available to make up contributions, delivered in plain language, at a point when the information is relevant, are more likely to prompt action than a quarterly newsletter or an annual benefits statement.
For larger organisations, this kind of provision might sit within an existing learning management system. For smaller businesses, that infrastructure usually doesn’t exist, which is where digital e-learning platforms can be useful because they giveg employees access to professionally developed content they can work through at their own pace, without requiring the employer to build it from scratch.
Sources: Scottish Widows Women and Retirement Report 2025; ONS — The impact of motherhood on monthly employee earnings and employment status, England: April 2014 to December 2022; Pensions and Lifetime Savings Association Retirement Living Standards