Income drawdown: Bridging the gender gap

This article is part of
Retirement – December 2012


    Without doubt, women are under-represented in many walks of life. The 800,000 births every year in the UK go some way to explaining this, with the majority of parental leave still taken by women, but it is not the only factor.

    There are other reasons why differences polarise along gender lines – for example, the Department for Work and Pensions notes that more than 40 per cent of women between 16 and state pension age are out of the labour market to fulfil caring responsibilities. Men, on the other hand, are more likely to be inactive for health reasons.

    In business this disparity is changing, but it is taking time and is not consistent. According to the Department for Business, Innovation and Skills, women now make up 16.7 per cent of all board posts in the FTSE 100, up from just 12.5 per cent a year ago. Yet despite this strong growth, there are only two female CEOs in the group – Angela Ahrendts and Alison Cooper. The FTSE 250 is even lower, with female board members increasing from just 7.8 per cent to 10.9 per cent over the same period.

    Article continues after advert

    The FTSE 100 and FTSE 250 may not be the most representative groups, but they are nevertheless helpful. Comparisons could also be drawn with the House of Commons, where almost 25 per cent of MPs are women, and the House of Lords, where they total around 20 per cent. But what do the figures look like for Sipps and drawdown?

    Women and pensions

    There are numerous surveys and research that compare the savings of men and women in the UK pension market, but there is very little information on Sipps. The FSA has only recently started collating information, with trends and statistics over time yet to be seen. Unless publication of specific data is required by the FSA, there is no onus on providers to release detailed information on gender.

    While figures will vary across Sipp providers in the market, data from Suffolk Life paints an interesting picture, as shown in Table 1. A glance at the research shows that just 20.6 per cent of Sipp investors are women. Perhaps the fact that men outweigh women is not surprising. It is safe to assume financial advisers introducing business do not discriminate between men and women, therefore the majority of their clients with investable pension assets must be men.

    However, change is coming, just as in the boardroom. As shown in Graph 1, female Sipp investors now tend to start saving younger than men, according to patterns identified by Suffolk Life.

    Another trend is evident: not as many women as men keep their Sipps into drawdown. Nearly 50 per cent more men crystallise into drawdown than women who, despite living longer, are getting out of their Sipps before their male counterparts.

    The appetite for investment risk can clearly differ from what is considered palatable for income – and then there are other risks, too.

    Risk of the regulator reducing risk

    There is no gender bias in the recent actions from the regulator, from its findings into the thematic review of Sipp operators to the more recent consultation paper, CP 12/29, that builds on CP 12/05. But neither men nor women can ignore that both papers show the FSA has serious concerns about some Sipp providers. In particular, it highlighted that they:


    Questions appear on the last page of this article.