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Could plans to close the gender pension gap become a tax break for wealthier couples?

ended 26. August 2026

Former Pensions Minister Steve Webb has proposed allowing higher earners to pay into their partner's pension while effectively securing higher-rate tax relief for the lower-earning partner.

The aim is to tackle the gender pension gap by encouraging couples to build pension wealth more evenly, particularly where one partner has earned less or taken time away from work to care for children or relatives.

But could the proposal have unintended consequences?

Critics may argue that much of the gender pension gap originates in differences in earnings and caring responsibilities rather than the pension system itself.

There is also a question over who would gain most from additional tax relief. Couples where both partners expect to remain basic-rate taxpayers in retirement may receive relatively limited tax benefit from shifting pension wealth between them. Potentially much greater benefits arise where a higher earner would otherwise pay higher-rate tax on pension withdrawals.

For married couples and civil partners, pensions can also already form part of the financial settlement on divorce, including through pension sharing orders.

So could additional pension tax relief end up disproportionately benefiting relatively affluent households rather than those most vulnerable to poverty in retirement?

Questions for experts

  • Would allowing higher-rate relief on contributions to a lower-earning partner's pension help close the gender pension gap?
  • Who would actually benefit most financially from the proposal?
  • Could it inadvertently create another valuable tax-planning opportunity for wealthier couples?
  • Is unequal pension ownership necessarily a problem where couples pool their finances?
  • Should policy instead concentrate on the underlying causes of the gender pension gap, particularly career breaks and caring responsibilities?
  • What, if anything, would you do differently?

7 responses from the Newspage community

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Scott Gallacher
Director at Rowley Turton
While many of our clients would probably be among the biggest winners from this proposal, I think it is fundamentally flawed.

The gender pension gap is real, but much of it reflects the unequal impact of caring responsibilities on earnings and pension contributions. Giving additional higher-rate tax relief doesn't address that underlying problem.

For married couples who stay together, unequal pension pots are often largely irrelevant if their finances are genuinely shared. If they divorce, pensions can already be divided through pension sharing.

The greatest tax benefit could therefore go to wealthier couples where one partner would otherwise pay higher-rate tax on their retirement income. We risk introducing an expensive new tax break for relatively affluent households in the name of tackling pension inequality, while doing relatively little for those actually at risk of pension poverty.
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Ben Perks
Managing Director at Orchard Financial Advisers
This statement may be a wolf in sheep’s clothing. With the IHT changes to pensions, the government could be lining their own pockets under the guise of supporting women. These days, any contributions to pensions should be chatted through with an adviser, not on the basis of a soundbite from a former pensions minister.
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Anita Wright
Chartered Financial Planner at Ribble Wealth Management
There are two ways to close a gap: lift the bottom, or shuffle what’s already there. This does the second. To use it, you need a partner earning enough to pay higher rate tax. That’s the entry ticket. So the women it helps most are the women already married to money. The single mother, the divorcee, the carer with no wealthy spouse to sit behind nothing changes for them. Their gap doesn’t move an inch. And no new money gets saved. A pound moves from his pot to hers, the taxpayer funds the move, and a chart looks tidier next year. We’d have fixed the measurement, not the problem.
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Iain Thompson
Director at Evolve Finance
Steve Webb’s proposal is a well-meaning policy that will instantly be weaponised as a premium tax-planning loophole for affluent households.

For high-earning property investors and landlords currently squeezed by rigid section 24 tax changes, this structure wouldn't just close a gender gap—it would serve as a major wealth-shifting vehicle. We would immediately see wealthier clients route rental profits or corporate dividends directly into a lower-earning spouse’s pension. This allows them to strip out heavy higher-rate liabilities while safely building a tax-sheltered asset pool.

If couples already pool finances or rely on joint property portfolios for retirement, unequal pension ownership isn't the core issue. Instead of creating complex new tax shelters that disproportionately benefit affluent property owners, policy should focus on reforming the rigid lifetime allowances and workplace contribution rules that penalise genuine career breaks.
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Harvey Dhillon
Founder & CEO at Zmartly
A higher earner can already pay into their partner's pension. A contribution can be paid by or on behalf of the partner, and the relief is worked out on the partner's income, not the payer's. So the proposal doesn't open a new route, it raises the subsidy on a route couples already have. It pays most to a top-rate payer whose partner pays basic rate or none. As a way to close the gender pension gap, it's decoration. For a partner with no earnings, relief is currently capped at contributions of £3,600 a year whatever the higher earner puts in. Pooling is an assumption about behaviour, not a rule. Pension sharing is open only to married couples and civil partners, so an unmarried partner cannot be awarded a share of the other's pot. The underlying causes are the better target. Someone who goes part-time to care for a relative and earns under £10,000 in a job isn't enrolled automatically, so they save only if they think to ask. I'd move that line before I'd move the rate of relief.
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Nouran Moustafa
Practice Principal & IFA at Roxton Wealth
It is a clever idea, but let’s be clear: this would help close the pension gap inside wealthier couples, not solve the gender pension gap.

The women most at risk in retirement are often not married to someone with spare income paying higher-rate tax. They are women who took career breaks, worked part-time, earned less and missed years of employer contributions and compounding.

I would support allowing couples more flexibility, but I would not dress it up as the answer. Otherwise we create another generous tax-planning tool for affluent households while the women with the smallest pensions get almost nothing from it.

The real fix is earlier: better pension support during caring years, stronger contributions when people return to work and making sure career breaks do not permanently wreck retirement outcomes.

A tax break can redistribute pension wealth within a marriage. It cannot fix the reason the gap exists.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
With the government seemingly looking for ways to make pensions less and less attractive, I can't see them allowing this.

It would make for a fantastic planning tool where more higher rate tax relief could be claimed on the way in, and pension withdrawals could be structured more tax efficiently too, minimising the tax take on the way out.