The gender pensions gap is a structural problem, developed from the very root of financial services, according to Ranila Ravi-Burslem, intermediary distribution director at Scottish Widows.
Speaking on a panel discussion at the FTAdviser Financial Advice Forum 2023, Ravi-Burslem said the gender pensions gap starts with employment.
Firstly, there's a pay gap and on average, a female earns £10,000 pounds less than a male, she explained.
Secondly, more women work part time than men and around 72 per cent of part time workers are female.
“And then there is what I would call the baby penalty,” Ravi-Burslem said.
“Women go off, have children, they take either time out of the workforce temporarily for maternity or on a permanent basis and that all adds up.
“All of those issues lead to a pay gap, which leads to the pensions gap.”
Another issue is financial capability, she explained.
“Despite women being good at budgeting and looking after the money in the short term, when it comes to financial confidence and thinking about finance longer term, I think the way that the industry is structured, the language we use, the way we promote solutions is actually very male dominated.
“It's designed by men for men and so it puts women off from engaging with the topic.”
Samantha Secomb, chartered financial planner at Women's Wealth, was also on the panel and asked the audience how many of the gentlemen in the room believe there will be as many men at home caring for children next decade, as there are women.
The room did not get any raised hands.
She said: “Until there's equality of carers at home, there won't be equality of women in the workplace.”
Meanwhile, Rebecca Robertson, IFA at Evolution Financial Planning said she went through a real big change after having a child, having been made redundant and being in a difficult place.
“It changed me as a person, I lost my identity and I eventually went self employed and started my business because it was flexible,” she said.
“That's what's happening to a lot of women and for women who do have children, there's a massive issue with that, especially if they're not in a corporate environment that is very flexible with flexible working.”
What can advisers do
Financial advisers have a key role to play when it comes to financially educating women and helping to reduce the gender pensions gap.
Secomb said: “We have a massive role to play in just breaking down the stereotypical behaviour and thinking.
“There are allowances we can use to encourage people to save - even if they're not earning - into a pension, because they don’t know about it."
She explained that clients need a lot of encouragement from advisers to get longer term thinking involved in the equalisation of assets.
Additionally, Robertson said one thing that advisers can do is start having that generational wealth conversation.
“The female can be almost put to the bottom of the ladder when it comes to the needs of the overall family,” she said.
The work for professional bodies is not the standards and the qualifications and the trust - that's really important - but there's that broader role about awareness raising and being advocates. Tracy Vegro, CISI“It takes a whole family to look after children, a whole village, and financially speaking, she’s also forgotten about because she stopped paying into a pension. She might only go back to work part time and so it’s really important to ask the question of whether the couple can be using the pension allowances that she still has access to with his salary.
“It's getting them to have a conversation as a couple about how they want to manage their finances.”
Elsewhere, Tracy Vegro, chief executive officer at the Chartered Institute for Securities and Investment discussed how professional bodies can help with this.
Vegro said the CISI does a lot of work with young people in schools to raise awareness and knowledge about the profession.
Additionally, she added: “The other thing is that we can increase the pipeline of people coming into a sector that they may not know very much about.”
One way the CISI does this is through an event with schools called Change which tries to raise awareness of how important financial planning is.
Another thing the CISI does is financial planning week every January, where a lot of members volunteer a week of pro bono services.
“It's a very good cause but it's also very good at raising the profile of the important advice that you can get, and that is not as costly as people think,” she said.
sonia.rach@ft.com
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