This year on International Women’s Day, I had a lively conversation with a female colleague who argued that women didn’t need a ‘day’ as ‘we are equal now’. I agree, we are equal in that the law protects us from discrimination, but when it comes to financial wellbeing women continue to be seriously disadvantaged throughout their lives.
Some statistics on this:
- The national gender pay gap is 9% for full-time workers, rising to 14% for those in their 40s and 18% in their 50s
- Society increasingly expects mothers to work part time (and care for family) and yet part timers are paid 30% less
- At age 65–69 men’s average pension pot is £179,091 – five times that of the average woman’s
- Women live longer than men (83 years vs 79 years) and tend to outlive partners that they have cared for, leaving them with no one and not enough money to pay for their own care in old age
Do you still think we don’t need a ‘day’?
The key problem here is that society and its supporting structures has changed so much in recent generations. Both men and women face more financial risks today and have less protection and support from the welfare state. Unfortunately, these risks in life are disproportionately borne by women who conversely are less-prepared than men to bear them.
Let’s start with raising a family. While steps have been made in opening up paternity leave to men, the majority of childcare is still borne by women. While women aren’t working, they miss out on pension contributions and national insurance contributions and often, which can make a huge difference over their working life. A woman aged 25 taking a five-year career break will accumulate a pension pot that is 33% smaller than their male counterparts.
Meanwhile, being out of the workplace or working part time to care for family can limit women’s career progression and is a contributing factor to the 9% pay gap we currently live with.
At the end of their working lives, women face a double-whammy of living longer than men and not having enough retirement income to live on. In a traditional marriage partnership, the husband will begin to need care before the wife and she will typically care for him, with any pension savings going towards support in the home or residential care. Later, she will need care but will have outlived her partner and possible their retirement savings too. So how will she pay for her own care?
These are just a couple of the big issues that impact the financial inequality between the genders. There isn’t time to go into what happens when couples divorce or how women are more likely to suffer from mental illness and domestic abuse, but it’s clear that women aren’t prepared for the risks they face in life.
The Insuring Women’s Futures (IWF) Initiative, led by the Chartered Insurance Institute, is spearheading a campaign to get women talking about their finances to help them better prepare for the future. The ‘Talk to Ten Thousand’ campaign calls on all of us working in the financial services industry to have a conversation with the women in our lives around these issues to get them thinking about planning for the future.
Hundreds of IWF ambassadors have already signed up to run sessions in their workplaces, at schools and in community groups. But the campaign is encouraging ambassadors to talk to women in less formal situations too, over a cup of tea with family and friends for example. The idea is not to give advice but to get women thinking about the future and encourage them to take steps to build their own financial resilience. There are plenty of resources on the IWF website to help women make positive changes.
Ten thousand women won’t change the world, but it’s a start. If we can each support one woman to take control of her financial future, that will make a big difference to her quality of life.
This isn’t about men and women, this is about helping all of society to be more resilient to the financial shocks they face in life.
If you would like to get involved, you can sign up to become an ambassador here: https://www.insuringwomensfutures.co.uk/contact-us/
*All statistics quoted from Insuring Women’s Futures.