The gender pensions gap is leaving many women facing poverty in retirement, and without urgent action, it will never close, writes Scottish Widows MD Jackie Leiper in today’s Notebook
20 years of tackling the gender pensions gap
The state of women’s retirement savings has undergone a lot of change in the last 20 years since we started delving into what retirement, and the journey to it, looks like for women.
There have been game-changing interventions, and they really have shifted the dial. Auto-enrolment has brought millions of women into workplace pension schemes and at the same time there have been improvements in equality on women’s pay and role in society.
But there have also been missed opportunities and the numbers show that we’re still a long way from where we need to be.
If, and only if, progress continues at the same rate, we’re still at least two decades from closing the gender pension gap. That’s 20 years of women, on average, retiring with less money than men despite life expectancy data telling us they’ll live longer. And 42 per cent of women are currently facing poverty in retirement. This must change!
Women’s financial lives differ greatly to men’s; their working lives don’t always follow a linear pattern, and this disruption is intrinsically linked with the gender pension gap. Reforms to auto-enrolment, which have already been legislated, like removing the lower earnings limit and reducing the age requirements, must be implemented quickly to support the higher numbers of women who are in lower paid jobs, part-time work or self-employed.
I’d like to see a shift in financial planning so that women don’t lose out when their partner is buying an annuity or in the event of divorce – significant milestones which can put women on the back foot financially. The other part of the puzzle is empowering women, especially encouraging younger women, to invest their money and grow their retirement wealth with education and support.
Time is running out and the pace of change must quicken – we simply can’t sit back and wait another two decades. Without further action, the gender pensions gap will never close.
C-suite gender equality continues to lag
Women are at the helm of some of the biggest, and fastest growing, companies in the UK. I find it incredibly inspiring, but the reality remains that only one in 10 businesses have a female CEO. Progress on gender equality in the C-suite has been painfully slow and it’s evidently clear there is still a lot of work to be done.
The women holding these senior roles are true trailblazers, enabling others to see what is possible, but we need to see more practical solutions, while longer-term changes shift our workplace culture.
In-house programmes and initiatives actively working on building frameworks for gender equity should be a minimum in every firm in the financial services industry. Flexible working patterns and job sharing at a senior level should be the norm, allowing people to juggle and enjoy both work and home life.
There are thousands of highly talented women in the financial services industry. It’s time these women were given the space and support they need to prosper and show the world that the financial services sector is where talent is the measure of success, not gender.
Like mother, like daughter
Instilling healthy financial habits in my daughter from the outset has been my mission. We’ve just reviewed her pension contributions, set up her first investment ISA and also got her putting money into an emergency savings account! All of these will hopefully start positive habits and set her in good stead for the future.
A recommendation
I’ve got a good TV recommendation and it’s likely many of you are watching it already. I continue to be enthralled by Strictly Come Dancing every Saturday night. I’m in awe of Chris McCausland and his dances with Dianne. It’s incredibly inspirational and if you haven’t seen this weekend’s performance, I’d recommend watching it this evening.
And if you fancy a sweet treat to go alongside your Saturday night viewing, I can recommend a Tunnock’s Teacake. It’s my favourite thing to have with a cup of tea and Tunnock’s is still a family run business based in Scotland, producing over 3m cakes a week.
My Granny K used to bring me a Teacake on a Saturday night when she was babysitting, and that tradition has long continued.