More female advisers needed to close gender imbalances at retirement

Efforts to encourage greater gender diversity in the adviser profession should be accelerated in order to close the gender retirement income gap, according to speakers at a virtual policy debate hosted by the Equity Release Council (ERC) and Key.

The debate followed the release of the Pension/Property Paradox: revisiting the retirement confidence gap report by the ERC and Key, which found that nearly half of working women aged 55 and above were anxious about running out of money in retirement.

ABI director of policy, long term savings and protection, Dr Yvonne Braun, highlighted the importance of the adviser profession in remedying this issue, stating: “In the advice profession men vastly outnumber women. A male-dominated profession will find it harder to attract female customers.”

Key CEO, Will Hale, added: “There is a huge opportunity in this market to engage women. Our client base is diverse, so the advice provision needs to reflect that.

"There are not enough female advisers in the industry and we need to address these imbalances by accelerating the focus on recruiting and training more female advisers.”

Aside from pushing to recruit and train more female advisers, the speakers also debated other measures which might lessen the gender retirement income gap, such as making changes to auto-enrolment.

Braun commented: “Three-quarters of part-time workers are women, which means many are therefore locked out of auto-enrolment. Contributions for pensions should be counted from the first pound people earn.”

Hale agreed that “initiatives like auto-enrolment and addressing the gender pay gap will help in the long-term”, but warned that those currently approaching retirement would “not reap these benefits” and so needed immediate help in navigating their way to a comfortable retirement.

Additionally, the debate examined the effects of the Covid-19 pandemic on women’s retirement outlooks, noting that government figures showed that the annual average pensioner income for single women had increased by just 2 per cent over the last five years, compared to an 11 per cent increase for single men.

The ERC noted that this has led the gender retirement income gap to more than double from £1,560 a year in 2014/15 to £3,276 in 2019/20.

Caroline Nokes MP noted that these imbalances could be exacerbated by the pandemic, stating: “Raising families is a joint enterprise and Covid-19 has thrusted many into hard fiscal choices about who should work and who should provide care for children or relatives.

"This shouldn’t be the case in 2021 so we need to talk more about shared savings.”

The Pensions Regulator unveiled data in March which showed that the gender pensions gap had decreased by 2.4 percentage points to 6.3 per cent over the past 12 months, while analysis released by Scottish Widows in the same month said the average woman needed to increase pension contributions by 5 per cent at the start of their career to close the gap.

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