This year’s International Women’s Day (IWD) takes place on 8 March, with the theme of “Accelerate Action”. The event aims to speed up progress towards global gender equality, which is moving far too slowly.
In fact, at the current rate of progress, it will take roughly five generations – or until 2158 – to reach full gender parity, according to data published by IWD and based on figures from the World Economic Forum.
Financial advice and education are important areas where we can help to close the gap more quickly. This is especially true when it comes to your pensions and investments.
Keep reading for your look at why the gender gap exists, how advice can help to close it, and why it’s essential to factor these potential obstacles into your long-term planning.
Job patterns and gender stereotypes mean that the gender pay gap persists
The gender finance gap is not the result of just one factor, but has many causes, and can affect multiple areas of your life.
The ‘Scottish Widows Women and Retirement Report 2024’ is the 20th that they’ve produced. It highlights significant developments over the last two decades while also confirming that there’s still much to do.
UK women are only slightly less likely to be in employment than men (72% compared to 78%), but they are likely to be paid less. Since 2003, the gap in the average hourly rate for women and men has fallen from 25% to 14%, but this doesn’t tell the whole story.
Women are almost three times as likely to be in part-time work, with 38% of women working this way, versus just 14% of men. Women are also:
- 36% more likely to provide unpaid care
- 33% more likely to provide unpaid childcare.
Care commitments, and the continuing prevalence of gender stereotypical roles in the house, mean that women are earning less. Due in large part to this pay discrepancy, women are also saving less for retirement.
While financial advice can’t help you close the gender pay gap, we can work with you to ensure you’re using your income tax-efficiently, to provide for your future.
Advice can help to close the gender retirement gap whenever you start to focus on your life after work
The average age for a woman to have a first child is around 29, which can coincide with a crucial time for career development. Time off to start a family, and then further leave to look after and raise children can mean missing out on promotions or career progression. This lost ground can be hard to make up.
Women in their 30s, then, may well have different working patterns to their male counterparts. And while gender stereotypes around caregiving persist, the gender pay gap will be hard to bridge.
Lower income levels inevitably make it harder for women to save for their future. The gender retirement gap starts to widen around the time the average UK woman has their first child.
Later in life, menopause can also lead to time off work and missed pension contributions, likely when salaries hit a career peak. This has a knock-on for pension saving in the crucial years leading up to retirement.
Education can help to close the investment gap and bring you closer to your dream lifestyle
When finances are stretched and paying your future self isn’t a priority, it’s easier to become risk averse. Investment returns can play an important role in long-term financial planning but it’s an area where many women are missing out. Your pension may be the only investment product you hold, but it’s far from the only one available. You might invest in stocks and shares, property or UK government bonds, known as “gilts”.
A gender gap exists here, though, too. While 55% of men hold investments outside of their pensions, this figure falls to just 38% of women.
Back in March 2024, an Aviva report into the gender investment gap found that while women might hold a savings account (61%) or Cash ISA (35%), only 17% hold a Stocks and Shares ISA (compared to 30% of men). Men are also twice as likely (19% compared to 8%) to hold a self-invested personal pension (SIPP).
Some of the main reasons that women give for putting off investing include:
- The risk is too high (18%)
- It’s too complicated (10%)
- Not knowing where to start (6%).
You might feel like investing “isn’t for you” but a well-managed portfolio, aligned to your risk profile and goals, could help you live your dream lifestyle in later life, and provide financial security (albeit with a certain level of risk attached).
Advice can provide the guidance and financial education you need to look after your own future stability so be sure to get in touch and speak to us.
Get in touch
If you’re looking to mark International Women’s Day by taking firmer control of your finances, you might be looking for an independent financial adviser in Milton Keynes or Olney. Look no further.
At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
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