We are working with workplace schemes to understand retirement savings by gender, and lobbying government on changes to reduce the gap, for example, lowering the auto-enrolment age from 22 to 18; Increasing the higher default contribution rates to help reduce the gap.
FTA: Are women less likely to talk money or to take advice? If so, what can we do to help shift the conversations and encourage more women to take professional financial advice?
SB: In the past, traditional gender roles might be responsible for an assumption that men should handle finances. There is no reason now why women cannot be knowledgeable about money, confident in seeking financial advice, and able to make great financial decisions.
Going back to the intergenerational planning conversation, including the whole family and normalising conversations on finance could help educate and encourage an interest in personal finance from an early age for both genders.
Some woman may feel uncomfortable talking through health questions to a male adviser, for example on a protection application, prompting the need for a greater female representation of advisers. Education, awareness and family financial planning conversations are key here.
FTA: What sort of life stages might be good entry points for a woman to consider financial advice?
SB: All throughout life! Some occasions are more significant than others in terms of financial advice – such as getting married/starting a family or making a career change, but the Chartered Insurance Institute has identified six 'moments that matter', which impacts a woman’s financial resilience:
- Growing up, studying and re-qualifying; – social influences can have significant impacts on perceived roles in society and lead to differences in career choices, as well as historic gender stereotypes regarding attitudes to money.
- Entering and re-entering the workplace – temporary or low-pay and impact on auto-enrolment eligibility, lack of understanding of different pensions to determine correct choice for circumstance, impact of reduced pay (maternity, part-time etc) on future financial wellbeing (pensions, savings)
- Relationships: making and breaking up; getting married; joint account; income protection insurance; divorce – separation of finances (negative emotions – advisers can provide unbiased advice – pensions not usually considered in divorce settlements), impact of co-habitation vs marriage decision.
- Motherhood and becoming a carer; increased responsibilities push finances further down to-do list, opting to take on reduced hours/flexible working at work or part-time work to facilitate parental responsibilities (men less likely to do this societally).
- Later life, planning and entering retirement; lack of understanding around pensions, gender pensions gap, women unlikely to save as much as male counterparts, not seen as something women need to worry about if they have a husband/partner?
- Ill-health, infirmity and dying; lack of understanding surrounding inheritance circumstances or impact after death of household provider,
Financial advice can develop financial literacy and ultimately a greater understanding of one’s financial wellbeing, which are all things that will support in the closing of the gender pensions gap and protection gaps.
