How business can help improve women’s financial health
International Women’s Day, held on 8 March each year, is a great motivator for focusing attention on issues affecting women.
While on this day in particular more women, organisations and women’s supporters rally around these causes, truly advocating for women isn’t only for International Women’s Day – it must be a 365-day, year-on-year commitment.
While we strive to balance things like equal representation in leadership roles on UK boards, there is a more fundamental and widespread gap when it comes to financial health, with women lagging behind men in terms of lower average salaries, pension pots and other savings.
Less financially fit
Attitudes to money also differ, with women lacking financial confidence and worrying more about money and these two factors lead to women being less financially fit than men.
As well as having lower average salaries, twice as many women than men earn less than £20,000 a year (40% compared with 20% men), but there are other contributing factors that explain these differences.
More women with families take career breaks or return to work part-time to manage childcare, with 47% of women in full-time work compared with 68% of men and 52% of women returning to work on reduced hours compared with 13% of men.
For some women, financial independence is not prioritised and in many opposite-sex families women delegate personal financial management to their male spouse/partner.
In addition, in divorce, which affects almost half of all marriages, women in opposite-sex couples are often the more financially vulnerable party.
So what can be done to bridge this gap and raise women’s financial health to the same standard as their male counterparts?
Workplaces have an important role to play in supporting women’s financial wellbeing, with some considerations:
1. Big data
Request data from your payroll, EAP, pensions, share plans and other financial benefits providers, so you have an accurate measure of the differences between take-up, savings rates and activity between women and men in your workplace.
This is a good starting point to identify any more vulnerable segments and to spot trends.
2. Female focus
Ensure your providers include relevant resources, content and examples to highlight the added risks to financial health of not aiming for financial independence and the impact of career breaks and returning to part-time working.
This information, guidance and support should be made available for those considering these events - before, during and after.
3. Hiring and promotion
The more women there are in senior and leadership roles, the more this will counteract those in lower paid and part-time roles.
Review your position, set a strategy and roll it out to all those hiring and promoting in your business. For example, consider your strategy to support women returning to the workplace following extended career breaks.
4. Support around key life moments
There are pivotal life moments that are likely to add financial risk for all employees and particularly for women – marriage, divorce, having a family, career break, returning to work on reduced hours, caring for others and ill health.
Review your policies, procedures and communications to ensure the support you offer is clear and that employees have access to easy-to-use tools so they can assess the potential financial impact which can then form part of their planning.
Financial independence
For families, instilling the importance of aiming for financial independence in both young females and males is an essential starting point.
For every adult, even those in a committed partnership, financial independence and ensuring a fair share of financial responsibilities is key.
Being open about finances and reviewing these both as individuals and as a couple, with equal involvement in financial decisions, is a good way to ensure both parties in a relationship are not financially disadvantaged.
For example, when planning to raise a family, if one parent takes a 12-month career break and the other parent continues to work full-time, review how the working parent will ‘share’ their pension and other savings to ensure that the stay-at-home parent doesn’t lose out.
Everyone has a role to play in helping to bring women’s financial wellbeing in line with men’s.
So whether it’s looking at making improvements to policies, procedures and communications in your organisation, supporting women at work to focus on their finances, or supporting your mum, granny, sister, aunty, daughter, niece or friend, use the momentum from International Women’s Day to kick-start those conversations and start making a difference.
In partnership with Close Brothers
Close Brothers has been providing financial education services to employees of some of the UK's best known organisations for over 50 years.
