Equal pay: Gender gap reaches 11.5% as retirement help is not ‘getting through’ to women | Personal Finance | Finance
Equal pay analysis from Close Brother’s “Changing Trends of Financial Wellbeing” showed that for this year, the full-time mean average gender pay gap is 11.5 percent, down from 13.1 percent in 2019. Effectively, this means that “Equal Pay Day” has moved six days later in the year but this may be skewed by coronavirus, with the impact resulting in a quarter of employers missing out from the data collected.
Janette Makings, the Head of Financial Education at Close Brothers, commented on the company’s findings: “Equal Pay Day has played a valuable role in the fight for financial equality, but the focus on salary is no longer sufficient.
“Women’s financial wellbeing has been proved time and time again to be in a worse position than men’s, resulting in women’s financial resilience, retirement, and other savings being significantly lower than men’s.
“The risk now is that the Covid-19 pandemic creates a ‘k-shaped’ recovery, with women significantly more vulnerable to the economic impact than men.
“According to McKinsey, women make up 39 percent of global employment, but 54 percent of job losses due to Covid – this is largely due to the spike in demand for unpaid care, a burden disproportionately carried by women.
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“It is important that everyone, from Governments to employers to individuals, ensure that the pandemic does not forget about equality.
“In the trifecta of physical, mental, and financial health, financial equality across gender must be a core element of the discussion.
“This means tailored education, targeted support, and a unanimous agreement to act with urgency.”
The same report also highlighted pension problems, with a third of female employees being reportedly “financially bad” when it comes to preparing for retirement, compared to just 16 percent of male employees.
Unfortunately, similar issues were found in research conducted by Just Group.
In analysing data from their own survey, the Money and Pensions Service and the Pensions Policy Institute, it was revealed nearly nine in 10 (88 percent) of women aged between 45 and 54 were not aware they are entitled to free and impartial pension guidance from the likes of Pension Wise.
Additionally, where women are aware of such guidance, it was revealed they are initially more sceptical than men about the value of a guidance session, with 45 percent thinking it would help them make sense of their retirement options compared to 56 percent of men.
This is regrettable as women could benefit the most from taking guidance, as Stephen Loew, a director at Just Group, commented: “Pension Wise should be a compelling proposition for women in particular but male users outnumber female users by three to two.”
Stephen went on to comment on the Government’s recent efforts to rectify these issues: “Usually the smaller the investment, the less likely people are to seek professional support. The fact that Pension Wise is free to users should overcome that cost blockage, but that message does not seem to be getting through.
“Government and regulators want to increase the numbers taking up their guidance entitlement because they know it gives people more confidence to make choices and avoid scams.
“It’s a chicken and egg situation – people who have a guidance appointment understand its value, but those who don’t know about it won’t book an appointment and find out how it can help them.
“Those with smaller pensions and less financial confidence and knowledge are in most need of support.
“Automatic bookings would help engage these groups who are less likely to ask for help.
“The Government has said that it wants taking the free guidance to be the ‘social norm’ for all those starting to take pension cash.
“Automatically booking appointments will make Pension Wise the gateway to retirement and would be particularly welcomed by the two-thirds of women who said they would value the helping hand.”