Single mothers reach retirement with pensions pot of £18,300, one third the size of the UK average woman, says NOW: Pensions

  • The average private pension pot for single mothers is £18,300 by the time they reach retirement, approximately a third (36%) of the average woman, at £51,000
  • This is less than an eighth (12%) of the average pension pot of men, of £156,000
  • Although single mothers are more likely to be in employment than the UK baseline, they are twice as likely to work part-time, and this has only increased during lockdown
  • The average single mother’s income is £18,290. That is a third (33%) lower than the UK average of £27,376
  • PLSA’s retirement living standards suggest an income of £20,200 a year in retirement is needed for a ‘moderate lifestyle’
  • If auto enrolment were to start from £1 of earnings, this would bring an additional 300,000 single mothers into workplace pensions.


New research commissioned by NOW: Pensions, the pension provider for 1.8 million people, has found that single mothers face huge barriers to saving, resulting in a private pension pot half of the UK average. Barriers to full-time work mean that single mothers have less savings opportunities, made worse by the continuing economic downturn resulting from the Covid-19 crisis.

The report, which will be published this Autumn by the Pensions Policy Institute (PPI), reveals that single mothers reach retirement age with a private pension worth £18,300 – this is almost one third less (30%) than divorced women who have £26,100 – 36% of the average woman’s savings of £51,000 and only 12% of the average man’s of £156,500.

In a separate survey of single mothers carried out by NOW: Pensions in March 2020, 69% said they rely on friends and family to help with childcare. Almost 1 in 3 (29%) of mothers with a child aged 14 and under has reduced their working hours because of childcare needs, compared to 1 in 20 (5%) fathers.

The recent Covid-19 lockdown has made it even harder for single mothers to work as many have had to juggle schoolwork, chores around the home, as well as their own work, without any help from family and friends.

Now that we are in the school summer holidays, it is expected that many single mothers will have to further reduce their hours in order to take on the sole caring responsibilities for their children. 

Single mothers have the highest rate of employment (76%), yet tend to earn the least

Despite having employment rates higher than the population average of 75%, many single mothers struggle to work full-time hours and therefore may not contribute to a workplace pension.

The combination of higher levels of part-time work, lower levels of pay and greater demands on their income as the sole earner in their household, means that they are likely to find it difficult to save adequately for retirement.

Part-time pension penalty

Of the 13.4 million employed women in the UK, 23% (3 million) do not meet the qualifying criteria for auto enrolment compared to 12% of men. This rises to 31% of single mothers, or 341,000. They are essentially locked-out of auto enrolment which means they are missing out on vital employer contributions.

If auto enrolment contributions were to start from £1 of earnings, this would increase the number of employed single mothers who are eligible by 9.3% – bringing an additional 300,000 single mothers into workplace pensions.

The study found that even those single mothers who are in full-time work earn on average £18,290 which is nearly a quarter (24%) less than other full-time women workers, who earn £24,150 and 33% less than the average UK population of £27,380.

Single mothers represent the biggest part-time workers

22% of the working population do so part-time, but almost twice that number of single mothers do (43%). This is nearly three times the number of single fathers that work part-time (15%).

This is because single mothers can find it more difficult to balance work and childcare needs as both the main earner and main caregiver, particularly as they do not have a partner with whom they can ‘shift parent’ and so rely on part-time work and often expensive childcare to manage. This has only been magnified during the pandemic.

Single mothers in part-time work earn on average just £6,922 annually, compared to £9,976 for women in general. That means the typical part-time working woman is not auto enrolled into a workplace pension, as pension saving is only triggered once earning £10,000 a year.

Home ownership remains low

Additionally, only 26% of single mothers own a home compared to the UK baseline of 65%. They are less likely to be able to save for a deposit and their lower than average household income makes it more difficult to secure a mortgage. This has significant consequences on wider financial health as renters tend to pay higher housing costs and face more instability.

Kelly Glazer, 41 from London, lives with her four-year-old daughter. In the nine months she was pregnant, she had to stop her pension contribution to make ends meet.

“Having a child is like having a second mortgage. Where others may be able to do overtime to help top up wages, that’s not an option we all have, as childcare also has to be considered. As a society, I don’t think we are very well educated about pensions and what they can do for our futures, so raising awareness is absolutely crucial.”

Joe Richardson, Research and Policy Officer, at Gingerbread Charity says: “Single parents face near-insurmountable barriers in securing work that pays the bills and allows for a decent standard of living. This new research shows that for many of them chronic low income will persist well into retirement. Single parents are unable to ‘shift parent’ like couples can, meaning they require external childcare support for every hour of work they do. High childcare costs mean many will only be able to work part-time and/or in insecure roles – two key determinants of low pay. Low pay matched with the costs of raising children makes poverty and debt the norm, while savings and pension pots become a pipedream.

“With childcare support being the main ‘gaping hole’ in the Chancellor’s Mini-Budget, COVID-19 threatens to lock single parents out of work altogether. With next to no childcare available, single parents will be forced to choose between going into work and leaving young children without supervision or staying at home and losing their job – a sure-fire route into unemployment.

“Urgent support is needed for the UK’s 1.8 million single parent families facing this dilemma. Without this, these families will face a generation of mass unemployment, poverty and debt”.

Samantha Gould, Senior Comms Manager at NOW: Pension commented: “This new report shows how stark pension saving can be for certain groups of women, particularly single mothers. Due to childcare responsibilities, single mothers will often need to sacrifice career progression and earning capacity in order to work around school time. By reducing their hours, they may not qualify for auto enrolment and miss out on a workplace pension and have little disposable income left over each month to invest into a private pension. 

With the average nursery costs now greater than the average mortgage payment, policies aimed at alleviating childcare responsibilities, in terms of both time and stress could help to improve labour market inequalities experienced by single mothers. These kinds of policies could reduce levels of part-time working and help single mothers to overcome issues of vertical segregation and low pay in the workplace. 

As a single parent myself, I relied on grandparents to help with childcare and reduce my career gap. In order to close this pension gap, it’s crucial that single mothers have greater access to affordable childcare and flexible working options in order to support career progression and ensure they can save adequately for later life.”

The report, published in Autumn, will look at six under-pensioned groups and the reasons for not being able to save sufficiently for later in life.





Notes to editors

For more information, please contact

Samantha Gould

NOW: Pensions

07827 3555 18


Fenella Cuthbert


0207 947 5327


The report by the Pensions Policy Institute and commissioned by NOW: Pensions will be published in Q3 2020. The results are modelled on 2018 UK data.

Notes to editors 

NOW: Pensions plan for fair pensions for all

  1. Removal of the £10,000 auto-enrolment trigger to get more women into auto-enrolment

This would bring an additional 1.9 million women in pension saving (300,000 single mothers).

  1. Auto enrolment contributions on every pound of earnings

This would improve pension part-time workers who are more likely to be women. This would increase pension wealth by 140% at retirement.

  1. The introduction of a family carer’s top up

Women taking time out to care are compensated in the State Pension by State Pension credits, however, they miss out on auto enrolment. The family carer’s top up would see the government pay the equivalent of the employers’ contribution at National Living Wage level into women’s pensions who are taking time out to care. This would equate to approximately £820 per year and would boost pension outcomes for women who take 10 years out due to caring responsibilities and returns to the workforce full-time by 20%.

The family carer top-up can close around half of the pension wealth gap created by taking time out of work to care for family.

  1. Divorce – make pension sharing the default

Ensuring that pension funds are always considered in divorce settlements – approximately 10% of men and 14% of women in their early 60s are divorced. The median pension wealth of divorced men and women by retirement is £103,500 and £26,100 respectively. These figures compared to the population indicate a pension wealth reduction of a third for men but a half for women, signifying a greater impact of divorce for women than men.

Although pension pots can often be the second most valuable asset when people are going through a divorce, they are often overlooked, with people paying more attention to property assets.

In 2018, there were 118,142 divorces but only 4,632 pension attachment orders were made by the family courts.

  1. Greater action on the availability and cost of childcare to enable those that want to return to work

Despite tax changes that help families with childcare costs, prices continue to rise. The Family and Childcare Trust reported in 2018 that childcare prices for children under three had risen above both inflation and wages in the previous year. Costs grew by 7% to £122 for 25 hours per week, equating to £6300 per year. Analysis of freedom of information request data by Insurer Royal London shows the high cost of childcare means working parents with toddlers pay more for childcare than their mortgage. A full-time nursery place for a child under two typically costs £1,065 a month, for example, while the average monthly mortgage repayment is £1,040 and the equivalent figure for renters is £833.

About NOW: Pensions

NOW: Pensions is leading UK workplace pension provider. We look after the pension savings of tens of thousands of employers and millions of members from a wide range of industry sectors.

We have a clear mission – to fight for a fair pension system that benefits everyone. Not only does this mean achieving the best financial outcomes for our own members, but also playing our part in ensuring that all pension savers get the retirement they deserve. We do this by highlighting pension inequalities and campaigning for change.

NOW: Pensions has a good technical infrastructure combined with a pension product suitable for our team. We couldn’t be happier with NOW: Pensions.
Martin Woods,