The gender pay gap is making the headlines again this week, with larger firms across the UK facing a deadline to publish their figures.
The presence of a gender pay gap in the UK is well known. Women typically earn less than men during their careers, with lower earnings the result of many different reasons. The reasons for lower pay include individual career choices as well as other innate, and external environmental factors.
Lower average pay for women also seems to have resulted in some severe impacts for their financial wellbeing. New research from Close Brothers, conducted with renowned corporate wellbeing expert Professor Sir Cary Cooper, found that women are twice as likely to worry about meeting their day-to-day living expenses as men. They found that 16% of female employees worry about this, compared to 7% of men.
Within Close Brothers’ newly developed Financial Wellbeing Index, UK employees scored an average of 53.6 out of 100. This index considers several areas of financial health. However, female employees scored themselves far lower than male employees, at just 48.1 compared with 58.3 for men, on average.
The research found that women perform worse than men across all seven areas of financial wellbeing. Worrying about money on a day-to-day basis represents underperformance for women in the short-term. They also trail behind men when it comes to their long-term financial planning. Nearly half of the responses from women reported that they felt unprepared for retirement. This was compared with a quarter of answers for men. Additionally, a third of women say that they are not confident that they will be able to achieve their long-term savings goals, nearly twice that of their male co-workers.
This finding is confirmed when we consider how much men and women have accumulated, on average, in pension savings. Earlier research from Close Brothers found that the average amount saved for retirement by women was less than half that saved by men, at £53,000 compared to £120,000.
A big factor in all of this is a lack of confidence when making financial decisions. This is partly due to a lack of understanding about financial products, including which are best suited to meet specific financial goals. Close Brothers found that only a third of women say they are confident in choosing the most suitable financial products for their long-term savings goals, compared with 50% among men.
Jeanette Makings, Head of Financial Education at Close Brothers said:
“With more women in lower paid roles, women are being paid less and therefore saving less, to the detriment of their financial wellbeing. But it is not the only underlying cause.
“The pressures and financial circumstances of female employees are often different to those of their male counterparts, so the level and focus of financial education on offer needs to reflect that. But the good news is that these issues are solvable.”
We agree that these issues are solvable which is why Wells Gibson is passionate about defining your desired lifestyle and goals and ensuring you have a Wealth Plan which gives you certainty and secures all that you value.
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