Women’s financial wellbeing hit hard, says Standard Life report
The ongoing cost of living crisis continues to bite the UK’s pension savers. But for women, especially, it seems to be having an even bigger impact on their financial futures.
This is a key finding in Standard Life’s Retirement Voice report 2022. Surveying almost 6,000 people in the UK on their views of retirement, the findings reveal the economic crisis is disproportionality affecting women’s financial wellbeing, their financial positivity, retirement outlook and ability to save for the future. And as a result, the gender pension gap is getting even wider.
How the cost of living crisis is affecting women
The report found:
- More women than men are worried that they’re not saving enough for their future (66% vs 49%).
- Women’s financial confidence has fallen further than men’s (52% of women say they are confident, vs 67% of men who feel confident in 2022, compared with 57% of women vs 70% of men who felt confident in 2021).
- The financial positivity gap between genders has risen to 17%, up from 10% in 2021, with significantly less women feeling positive about their financial situation compared with men (33% of women feeling confident, vs 50% of men who feel confident).
- The gender gap in retirement outlook has become wider. In 2022, women said they believe they’ll be able to fund their retirement for four years less than men. In 2021, that gap was three years.
These findings highlight that the cost of living crisis is reinforcing the barriers that many women already face when saving for their future.
Indeed, Phoenix Insights’ Caught in a Gap report, produced in partnership with the Institute for Employment Studies (IES), details several factors that hamper women’s ability to save for retirement, which in turn exacerbate the gender pension gap:
- Women’s finances are already disadvantaged by the gender pay gap. This means they are more likely to contribute less to retirement savings.
- Life stages such as motherhood, divorce, and menopause can disproportionately affect a woman’s earnings, which can further affect their ability to save.
- Women are more likely than men to earn below the auto-enrolment threshold because they are unable to engage in full-time work across different stages of their life.
More needs to be done to support women during these times of imbalance and uncertainty, as well as to tackle the gender pension gap to ensure it’s getting narrower, not wider.
Employers can play a key part in supporting women’s financial wellbeing and help them feel more secure about managing their money. Here are a few ways that you could provide help and guidance to your female members:
1) Encourage financial planning
Women who spend more time planning for retirement are more confident making financial decisions compared with those who don’t plan at all (58% vs 52%) and more positive about their financial situation (40% vs 33%).
You can help make it easier for your members to plan for their future by providing interactive tools and guidance – such as pension calculators and bite-sized content – that aim to make complex concepts more accessible.
At Standard Life, we provide a variety of tools that help members see what savings they have now, and what income they could expect in retirement. This includes Money Mindset, which gives members a holistic view of their finances and personalised alerts that help them plan their budget, make confident financial decisions and get practical support.
2) Communicate pension information clearly
In 2022, women feel less comfortable in their understanding of financial products than they did in 2021 (43% vs 50%). To help close this gap, it’s vital that employers make pension information as clear as possible. By boosting women’s financial knowledge, you can help improve their ability to make well-informed decisions.
A good place to start is to signpost members to financial education content that’s simple, easy to digest and targeted to their specific life stage or current financial situation.
You can also support members by sending communications at regular intervals. This could encourage them to check in with their pension plan, helping to increase their understanding and awareness of how their pension savings are performing and if they need to take action.
3) Provide targeted support at major life stages
The Caught in a Gap report found that the gender pension gap widens at major life stages such as motherhood, divorce and menopause. One way employers can help is to provide tailored support to women who are going through a challenging life transition – such as a relationship breakdown – to help them understand how this may affect their financial future.
At Standard Life, for example, we launched our Helping Hand programme to help employers support their members through life-changing events. Our initiatives include resources to help members in financial difficulties and a dedicated vulnerable customer team.
Ultimately, by providing tools, content and guidance tailored to support women – and delivering these at multiple points throughout their career and different life stages – you can help give their financial wellbeing the boost it needs.
In partnership with Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.
