The all-women session explored insights for inclusive advice in later life.
Kelly Melville-Kelly, director of risk, policy and compliance at the Council, who was facilitating the session, said:
“Despite legal strides towards gender equality, women continue to face economic disadvantages impacting their wealth accumulation, especially in retirement.
“Our own Home Advantage research revealed that women are 10% less confident than men in dealing with their mortgage. Having looked at additional research from LV, it reported that three in five women aged over 55 think that they will struggle financially in retirement.
“Standard Life Home Finance research found that among the customers who have not taken out equity release, increasing numbers were looking for an additional source of funds because their savings and pension were not enough, 19% in 2022 to 22% in 2023.
“Life events such as divorce, redundancy or illness drove a consistent 8% of people to access their housing equity annually. However, more than twice as many women as men, 13% and 5% respectively, cited this as a reason. This is not surprising given the pensions gap and the fact that for every £100 of private pension assets a man has, women have £65.
“Clearly housing wealth is likely to play an increasing role to help solve these problems.”
Helen Morrisey, head of retirement analysis at Hargreaves Lansdown, said:
“Women face enormous structural obstacles when it comes to building retirement wealth. Time out of the workforce caring for children, part time work and lower wages all conspire to give women far smaller pensions than men. To meet these challenges, we need major reforms such as the provision of good quality affordable childcare to help women remain in the workforce and build their wealth. 
“However, there are other factors that we also need to address – most notably getting more women engaging in investing through pensions and other vehicles such as ISAs. At Hargreaves Lansdown we launched our Financially Fearless initiative aimed at encouraging more women to invest and launched a huge research project aimed at exploring the barriers women face.
“The results are eye-popping and demonstrate that many women don’t see investing as something for them. If you take a look at Google, you can see where they are coming from – the images will be overwhelmingly of men. Strong female role models are vital in showing women that they can invest.
“Another key misconception that came out of our research was that women felt you had to be rich to start investing. When asked how much they would need to have to start investing the most common answer given was £1,000. However, the reality is that you can start investing in an ISA for as little as £25 per month and average monthly pension contributions would be well below this amount.
“Such views might feel strange in a world of auto-enrolment – a pension makes everyone an investor, but the fact is many people do not realise this. In recent research we did only around half of men and just 25% of women realise their pension is an investment. This is understandable given that we talk about saving into a pension rather than investing but it’s a misconception that needs to be addressed if the public as a whole and women in particular are to build financial resilience.”
Catherine Foot, director of Phoenix Insights, added:
“Over the last few decades, the UK pensions landscape has changed dramatically. The age of access to the State Pension has equalised for men and women, been simplified and its value determined by the triple lock, auto-enrolment has brought millions of workers newly into workplace pension saving, and pension freedoms now give savers rights to access their pensions early.
“Perhaps most critically, however, workplace pensions have become less generous, and the mass transition from final salary defined benefit (‘DB’) pensions to defined contribution (‘DC’) pensions for private sector workers leaves the responsibility for managing retirement incomes on individuals’ shoulders.
“In analysis of new data collected by Phoenix Insights, we found that DC pension savers are mostly not on track for the retirement incomes they want. In fact, only one in seven DC savers look set to retire at the age they want on the incomes they expect. This is, as former Pensions Minister Sir Steve Webb has described in, a slow-motion car crash we are all in the middle of.
“This problem of inadequate pensions is particularly acute for women. Women make up more than two-thirds of pensioners living in poverty. And half of all pensioners in poverty are single women.
“Women in their late 50s have on average less than two-thirds the pension savings of men, and overall the gender pension gap is estimated to stand at around 40 per cent. This remarkable gap is equivalent to women needing to work an extra 19 years longer than men to achieve the same size of pension pot.
“What causes this gap? Importantly, it is not a relative lack of engagement or investment in pensions. In fact, women on average contribute a slightly larger proportion of their salary to their pension than men up until middle age.
“Instead, it is principally caused by the structural disadvantages that women face in the labour market – it is women’s employment patterns and pay that lead to lower levels of pension saving. For example, women are more likely than men to fall under the £10,000 auto-enrolment threshold (35% vs 11%), due to low paid, part-time work. Women at all salary levels are more likely to work part-time and experience weaker career progression and salary growth than men. Women are more likely to experience periods of time not working due to caring responsibilities for children, partners and parents, and more likely to become economically inactive due to long-term health conditions. And finally, women are more likely to work in low pay sectors of the economy.
“Divorce can also disadvantage women further. Pensions are often overlooked in divorce settlements – according to family court statistics, 15 years after divorce only around 40% of settlements include a financial order, and less than a third of these include a pensions order.
“As the UK’s Gen X women approach retirement (the oldest Gen X are shortly to be turning 60), many may find themselves in for a nasty shock when they look at their pensions. It will become imperative that they can access good quality advice, guidance and information to make the most of all their assets in the most efficient and effective way possible to give them the quality of life in retirement they want and expect.”
