In recognition of the problem and in a bid to address it, a number of initiatives have been formed. A report by Fidelity, ‘The financial power of women’, notes the World Economic Forum has predicted it will take 217 years to achieve gender pensions parity, globally. But domestically, other factors look set to exacerbate the problem, in the short term at least.
On November 6 2018, men and women received their state pension at the same age for the first time in 70 years. The government’s decision to equalise the state pension age for both men and women has been met with fierce opposition, most notably from Women Against State Pension Inequality, the campaign arguing that the speed of implementation has left a cohort of women out of pocket and unable to make alternative plans.
Anna Sofat, chief executive at Addidi Wealth, says: “No wonder women are up in arms about it. If you are in that age bracket you’ve had it from all sides: you weren’t getting paid enough, your state pension’s been changed without due notice, and if you’re divorced the chances are you’ve come out worse on that front as well.”
Other research suggests pensions are rarely split in the event of divorce. The CII report uncovered that the median pension pot for divorced women is £9,000, though this does not take into account other assets.
Financial education
Yet it is clear the issue spreads wider than pay and pensions. The idea that men look after the family finances is still embedded into the nation’s culture, and carries with it a degree of irony considering the average women lives longer. This often means that, upon the death of their partner, women are forced to take on the financial burden in later life without having years of practice to support them in their task.
“Women still do tend to be less well educated financially than men,” says Rowena Griffiths, chartered financial planner at Female Financial Management. “I had an email from a woman facing divorce and her husband had made no mention of pensions when he totted up their assets. More tellingly, she didn’t think to ask about this, which is quite typical.”
But the problems spread across the financial spectrum, and are even more concentrated among the least well-off. Data from the government’s insolvency service found that female insolvencies reached 22.6 per cent last year, compared with 20.2 per cent of men. This was the fourth consecutive year that women’s insolvency rates were higher, despite the male ratio being twice as high as recently as in 2000, and remaining ahead for the following 13 years.
