Unequal futures: Women-led households, climate change, and the UK pension gap

As our understanding of climate change continues to grow, particularly in relation to its effects on housing, health, and economic stability, it becomes increasingly clear that its consequences are not evenly distributed. This article explores how climate change disproportionately affects women, especially those in women-led households. It also presents practical ideas for reducing these impacts. Some proposals call for fundamental structural changes across government, business, and society. Others are simpler and focus on achieving greater equity in income, employment, and access to services, helping to close the gender gap and move toward parity with men. 

Let’s deal with the facts. (And if you don’t believe in climate change, this article may not be for you.) 

The gender pension gap and financial insecurity 

• FACT: Women consistently have lower pension incomes than men. According to GOV.UK, the gender pension gap in private pensions is approximately c.35%, meaning women’s median private pension wealth is c.35% lower than men’s at the typical retirement age. 

• FACT: This disparity begins early. As highlighted by the advocacy group Pregnant Then Screwed (PtS), women are more likely to work part-time, take career breaks (often for caregiving), and earn less due to systemic income inequality. These factors reduce contributions to both private and public sector pensions. A recent example is the Birmingham City Council pay dispute (BBC News). 

• FACT: One study cited by Sky News found that retired women effectively stop receiving pension income for around four months each year compared to men. This equates to an average shortfall of £7,600 annually. 

This financial gap directly affects women’s disposable income, making them more vulnerable to the economic and social consequences of climate change. 

Climate-related costs fall more heavily on low-income households

Women-led households, which are more likely to fall into lower income brackets, face disproportionate burdens from climate-related costs.

• Rising energy and fuel costs hit lower-income households harder, as a larger share of their income goes toward essentials like heating and electricity (UK Health Alliance on Climate Change).

• Poor energy efficiency in housing is more common among low-income households, making it more expensive to heat, cool or retrofit homes (UK Health Alliance on Climate Change).

• Climate shocks such as floods, heatwaves and extreme weather have a greater impact on those with limited financial buffers, inadequate housing and fewer options to adapt or relocate. This is especially true for those in caregiving roles (Anglia Ruskin University).

• Emission-reduction policies can unintentionally increase costs for low-income households. For example, the climate change levy imposes a proportionally larger financial burden on the poorest (The Independent).

Women with low pension incomes are especially vulnerable

• Many retired women rely primarily on the state pension or small private pension pots. As shown above, women-led households are less likely to have savings or additional income to absorb rising costs from energy, inflation or climate-related expenses such as home repairs or temperature control.

• Food and energy price inflation disproportionately affects those with limited savings and investments, further straining household budgets.

Health, wellbeing and social consequences

• Cold and damp homes contribute to increased health problems, particularly for women. This leads to higher medical costs and stress. When pension income is low, the choice between heating and eating becomes a harsh reality (UK Health Alliance on Climate Change).

• Psychological stress is worsened by social isolation, especially when affordability limits access to transport, mobility and social activities.

• Poverty risk increases, along with the inability to maintain a basic standard of living.

Part 2: How can we fix this?

There are several ways to reduce the gender pension gap and ensure climate, energy and environmental policies do not worsen inequality. Ideally, they should help reduce it. It’s a complex issue, but here are some key proposals:

Pension reform and gender-equal policies

• Lower auto-enrolment thresholds - Reduce the income level required for automatic pension enrolment so that low earners, often women and part-time workers, are included.

• Caregiving and parental leave credits - Improve pension credits for those who take time out of work for childcare or caregiving. Ensure non-working partners receive credits and allow quicker re-enrolment after opting out (currently a three-year gap).

• Fair workplace policies - Promote equal pay, flexible working, paid carers’ leave and fair treatment in sectors where women are overrepresented in low-paid roles.

• State pension rule adjustments - Address inequities in how state pension credits are allocated, including women impacted by the inequality and those receiving Child Benefit.

Energy, housing and climate policy that protects low-income households

• Targeted home insulation and efficiency programmes - Improve energy efficiency in low-income households, delivered through trusted third-sector organisations or housing providers to ensure quality and prevent exploitation.

• Social energy tariffs - Expand subsidised energy pricing requirements across all distributors, especially in light of excessive profit margins.

• Grants for green technologies - Provide targeted financial support for adopting green technologies. As with home adaptations, ensure installations are carried out by accredited professionals.

• Build sustainable, low-cost homes - Invest in new housing that is both environmentally sustainable and affordable to maintain.

Note: Ensuring these subsidies and supports reach women-led and older-person-led households remains a challenge due to fraud concerns. This urgently needs addressing.

Legal and regulatory measures

• Pay transparency and enforcement of equal pay acts - Strengthen laws and reporting requirements around pay equality. Despite years of legislation, the gender pay gap persists and in some cases is worsening.

• Support for carers and flexible work - Protect the rights of paid and unpaid carers. Improve access to flexible working and parental leave to help women remain in stable, fairly paid employment.

• Regulation of pension providers - Ensure pension schemes minimise fragmentation of small pots, keep fees reasonable and actively inform women about their options to improve long-term outcomes.

Awareness, education and financial inclusion

• Financial literacy campaigns - Launch targeted awareness initiatives to help women understand pensions, savings, contribution options and state pension rules. These should be delivered by credible, trusted providers.

Summary

As outlined at the beginning, this is a deeply complex issue shaped by generations of inequality in pay and pensions for women. It is now being compounded by the accelerating climate crisis, driven by decades of inaction, underinvestment in alternatives and widespread misinformation.

While none of these challenges can be solved overnight, that does not mean we should look away. Instead, we must continue, individually and collectively, to take meaningful steps to reduce the impact and improve outcomes for women and all vulnerable groups.