How to empower women to engage with and feel confident about their financial wellbeing
The latest Office for National Statistics figures from 2020 show that the gap among full-time employees fell to 7.4% from 9% in 2019, and among all employees it fell to 15.5% from 17.4% in 2019.
The UK is also facing a gender pension gap, which is a much less publicised issue, but one which has the ability to impact severely on women’s long-term financial wellbeing. The Pensions Policy Institute (PPI) looked at this in July 2019 in its Understanding the Pensions Gender Gap report. It found that on average women in the UK have £51,000 in their pension pot, compared to the £157,000 average that men have set aside. The PPI also found that 50% more women than men face retirement with no private pension savings at all.
In addition there is also a gender investment gap. A YouGov survey in April 2018 found 52% of women have never owned an investment product, compared with 37% of men. The same study found the main drivers of this difference appear to be a lack of confidence and knowledge about investments; although 45% of men said they would feel confident investing some of their money, the figure among women was just 28%.
So if women are on average earning less, saving less for their future and are less confident about investing than their male counterparts, surely it’s natural that they will suffer from poorer financial wellbeing than men?
The answer is not necessarily. At Schroders Personal Wealth, we believe financial wellbeing isn’t about having the most money, but it’s about feeling in control and having confidence in your own financial situation. For us, financial wellbeing is all about having the freedom to be able to prioritise spending on the things which are most important to you.
In 2020 we produced our Money and Mind Report which provided an insight into the state of the UK’s finances. Our research clearly showed that women let money worries turn to stress more so than their male counterparts, with over half (54%) of women feeling stressed by their financial situation, compared with just 41% of men. The same research also closely linked stress and poor financial wellbeing to greater absenteeism at work, with 27% of respondents admitting that money worries impact their performance at work.
Considering how the financial wellbeing of all employees, but especially female employees, can be improved, should be a priority for employers.
What barriers might there be to getting more women engaged with their financial wellbeing?
Many professions use jargon to talk amongst themselves as a way of shortcutting their conversations. They can often forget that to the rest of the world it is all gobbledygook. Financial services is no different. But financial services appears to have an added complication: a gender bias that seems to be excluding half the population.
Some feel that at the root of this lack of confidence is the language of finance itself and the terms in which it is often discussed.
Financial services, and investments in particular, are full of metaphors which come from domains traditionally associated with, occupied by, or carried out by men. Examples include: ‘beating the market’ (war, aggression, fighting), ‘level playing field’ (football or sports) and ‘bull’ or ‘bear’ market (masculine traits, aggressive).
In addition, the industry itself doesn’t always lend itself to gender equality, with male financial advisers greatly outnumbering their female counterparts. This may lead to women who want to seek financial advice being serviced by someone who doesn’t fully understand their experience or take into consideration factors that primarily concern women, such as the effect of taking more career breaks. This could potentially have detrimental effects by discouraging women to be seek professional advice on their situation.
How can you as an employer help support your female employees and their financial wellbeing?
Employers are in a strong position to continue to aid and support the progression which has been made in recent years around gender equality. Here are some top tips for employers to think about:
Women should feel empowered to engage in the conversation of money and finances. To enable this, employers could proactively reach out to their female employees at key life stages to ensure that they’re aware of any employee benefits available to them, and their options moving forward. This could be at times such as upcoming maternity leave and options surrounding pension contributions whilst they are away from the workplace.
2) Lead by example
Having a senior leader within the organisation who can advocate the importance of financial wellbeing can be hugely powerful. This could be someone like the finance director, although it doesn’t necessarily need to be someone within the finance function. Make sure that the pillar of financial wellbeing is prominent and that any ‘sponsor’ is regularly communicating to your employees about the importance of understanding finances.
Storytelling is a great way to do this and can encourage others to come forward and share their experiences too. Remember that whilst support could be aimed at women it should not exclude men. Men within your company will all have women in their lives (mothers, partners, daughters, colleagues…) and it is important that they understand the gender equality challenge and play their part in creating the right culture.
3) Provide a range of support
As employers it is important to acknowledge that people learn and engage in different ways, and so you should consider the use of different engagement strategies that appeal to women. This support could include the provision of financial education, guidance and advice facilitated in the workplace. There are lots of providers, including ourselves, who can support employers to develop an effective financial wellbeing strategy comprising of all of these components. However, equally, it may be worthwhile engaging with any existing providers you have, including your workplace pension provider, to see what extra support and resources they could make available to you and your employees.
Consider digital resources that employees can access in their own time as well as online interactive events, such as webinars, which encourage interaction and the chance for employees to ask generic questions. You could look at hosting sessions specifically for female employees but again male colleagues would be welcome to join. This shouldn’t be seen as discriminatory but viewed in a positive way acknowledging the different needs that women in your business may have.
For those women within your business who do have more complex financial needs or want to speak to an adviser about their own personal circumstances, it could be advantageous to partner with a financial advisory firm to whom you can signpost employees to. Make sure any partner you bring on board aligns with your culture and can tailor support to meet the needs of your employees.
The authors are Hazel Cuttell, events & partnerships lead, and Leigh Dunkley, financial wellbeing lead, from Schroders Personal Wealth.
This article is provided by Schroders Personal Wealth.
In partnership with Schroders Personal Wealth
We believe financial wellbeing is not about having the most money.