The rights of women in the workplace have come a long way in the last 100 years. In 1919, the Sex Discrimination Removal Act was passed in the UK, enabling women to apply for jobs in the legal and civil service, ending male domination in the professions. It took another 50 years for The Equal Pay Act to gain its Royal Ascent in 1970, making it a criminal offence to pay women less money for performing the same role as men. While these were undoubtedly positive changes for women, recent research continues to show that the working landscape is not quite so simple as we hoped.
The Insuring Women’s Futures programme has conducted extensive research in the three years since its launch. This research has concluded that the factors which effect the ability for women to earn over the course of their lives are complex and multifaceted. The research has identified six key moments in life which impact women generally to a disproportionate extent as compared to men generally. But they also present the opportunity for targeted interventions to make a positive impact. It is in addressing this that we have a real opportunity to improve the financial resilience of the whole of society.
Growing up, studying, and requalifying
The divergence starts very early on, from the moment that young girls enter education. UCAs released figures this year showing that of those students who peruse education in science, technology, engineering, and mathematics, only 35% are female. Now, the reason that this impacts the earnings of women as a social group is because these are generally higher paid professions. In fact, female apprentices earn on average 21% less than males at the very beginning of their careers, and this is due to the sector in which they choose to work. We can see, therefore, that the conditions which shape our financial resilience start harming women almost instantly.
Entering and re-entering the workplace
Once within the workforce the earning power of women is diminished by multiple factors. The UK gender pay gap for full-time workers is already 9%. If part-time workers are included, the majority of whom are women, this doubles to 18%. But also, women are more likely to take career breaks which impacts the ease with which they can climb the career ladder, and more women than men work with zero-hour contract arrangements. These issues compound together, and the result is that men accumulate on average 80% more earnings than women over the course of their lives.
Relationships: making and breaking up
Difficulties can arise when people choose to bring their finances together, but even within arrangements of equal contributions, women have extra considerations to be aware of. For example, the average pension savings of married men in their 30s is around £53,000, which contrasts quite starkly to that of women, which is around £10,000. This is often the result of adhering to certain cultural and societal norms of traditional roles. But most importantly, 71% of couples do not discuss pension wealth, which can lead to significant imbalances when dividing assets during divorce for example.
Motherhood and becoming a carer
Becoming parents impacts men and women in profoundly different ways, despite much focus in recent years on overcoming this hurdle. Women are still much more likely to assume the role of primary care giver which entails drastic adjustments to work and life balance, for which many women opt to return to work part-time and earn around 30% per hour less on average than even full-time women. In later life too, more women than men are caring for relatives, which continues to impact their earnings.
Later life planning and entering retirement
More than three quarters of people who earn below the auto-enrolment threshold are women. By the time of retirement, women can have a pension pot worth as little as one fifth that of their male counterparts. This results in a 37% retirement income shortfall whereby women receive an average of £29,000 less than men over the course of a 20-year retirement.
Ill-health, infirmity, and dying
The average time it takes for a single person to save enough money for a deposit for their first home has climbed to a record 10 years according to recent figures from Hamptons. This is particularly pertinent when noting that 45% of care home costs are currently covered by selling homes. What’s more: women live longer than men, meaning that the already thinning financial resources have to be stretched even further, so that the average cost of elderly care for women is 62% more than that of men. Now, it is when considering this in conjunction with the multitude of factors which result in women having less financial resilience than men in general that we can perceive the looming consequences for us all of not addressing this problem.
Looking at these six key “Moments that Matter” together and understanding how they interlink we can understand that there is a real issue which needs to be properly addressed. It is a problem which is cumulative, and it is very important to look at each instance within the context of our entire financial life journey. The first step however is to talk, as women are much less likely than men to talk about finances. Women must be encouraged to discuss their financial futures to create the best opportunity to understand and navigate these moments that matter, and take ownership of the most prosperous future available.
