BLOG: International Women's Day - keeping the conversation going

As always, International Women's Day has bought renewed focus to the issues facing women in pension savings, with industry research highlighting the disparities that still persist.

There is no doubt that this is an important issue that the industry needs to be aware of and working to improve, particularly as many of the issues causing the gender pensions gap are not the fault of individual savers.

In fact, almost a year ago today, I wrote a blog entitled 'A gender gap, but not of our own making'; and although this may still stand true, it is increasingly clear that whilst the issue may not be of our own making, the solution must be.

Research published today (8 March) by Scottish Widows has firmly reframed the narrative, placing the power back into the hands of women, by encouraging them to increase their pension contributions in an effort to narrow the pensions gender gap further.

“Women were already facing systemic challenges when saving for retirement," commented Scottish Widows managing director of pensions, stockbroking and distribution, Jackie Leiper, emphasising that women have been amongst the hardest hit in the pandemic, with caring responsibilities and high childcare costs both making a dent in women's pension pots.

“Whilst we can’t change societal norms overnight, progress is still possible to help young women achieve a comfortable retirement", she continued. “By taking control of their contributions and increasing them as early as possible, young women stand a fighting chance of improving their long-term savings outlook.”

This also follows record progress made around the gender gap, which has reduced to just 1 per cent, with 59 per cent of women saving adequately, compared to 60 per cent of men..

Despite this, women would still need to work, on average, an extra 37 years compared to their male counterparts, retiring with £100,000 less. And even the 5 per cent pension contributions today recommended by Scottish Widows would only “almost close” the gap, with the pandemic further exacerbating underlying issues, such as childcare.

The industry also needs to consider its perception when asking users to save more, as recent research from Trafalgar House has highlighted that there is not just a pensions gender saving gap, but a pensions gender trust gap.

In particular, Trafalgar House's Trust and Confidence Index found that whilst men scored around 4.62 out of ten for how much they trusted the pensions industry, this fell nearly 3 per cent to 4.5 amongst women.

“The issue goes further though, as three in 10 respondents (28.9 per cent men, 30.1 per cent women) said their trust in the industry had a negative impact on the amount they had saved, with only 11.2 per cent (12.6 per cent men, 9.5 per cent women) saying it had positively encouraged them to save more,” highlights Trafalgar House technical manager, Karla Bradstock.

“This is a shocking statistic that should make the industry stand up and take notice. We cannot win the battle to build retirement savings if members do not have faith in the pensions system to support them.”

There are steps that female savers can take, however, with NFU Mutual highlighting potential benefits to be gained from tax relief, and Quilter calling for reforms around "convoluted child benefit rules" that it argued can put women's state pensions at risk.

Whilst there are a number of steps that female savers can take to help protect themselves against the impact of and mitigate the gender pensions gap, they need to trust the industry first, and these need to be communicated all year round, not only one day a year.

Broader reforms will nonetheless be needed alongside individual behaviour changes though, and whilst they may be a big ask, it doesn’t mean that we shouldn’t ask.

Indeed, Aegon Asset Management global head of inclusion and diversity, Lindsay Hudson, has emphasised that "we do not need to fix the women", but rather the underlying systems prompting inequalities.

“We need to change the systems which cause inequalities," she stated. "For example, Professor Robin Ely presented a very interesting study from the Harvard Business Review on the culture of overwork, which in turn can force employees to choose between work and a personal life."

"A culture of overwork hurts everyone but can disproportionately impact women.

"In modern society, both men and women want to thrive at home and at work, so we need to be very cautious when it comes to any implication that an “always on” culture is healthy."

It is not only female savers that are impacted by gender issues, however, as recent research from Barnett Waddingham highlighted that, despite progress in the corporate world, pension scheme trustees are “falling behind” in terms of gender diversity.

And whilst many know the right thing to say, with a recent PLSA survey finding that 84 per cent of schemes agree that there needs to be more diversity, not all are so willing to take action, with almost half (48 per cent) of schemes having no specific diversity or inclusion policy in place.

The pensions industry is very aware of the gender issues and inequities facing both savers and those within the industry, and many are taking steps to combat these issues, all year long.

As inequalities, whether they be gender or otherwise, become increasingly prevalent amid the pandemic, shining a light on the much needed solutions one day a year is no longer good enough.

We need to talk to women, and continue the fight to remove the barriers facing them both in their pension savings and their pensions careers, every day, not just on International Women’s Day.

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