The moments that matter for women: part 2 – attitudes to financial affairs
In the first part of this blog, we looked at the various issues highlighted in Securing the Financial Future of the Next Generation – a report produced by the Chartered Insurance Institute (CII). As identified in the report, we discussed how despite attaining better academically than males, women seem to lose their earning power as they progress in their careers.
Although the exact forces that cause this drop-off in earning are debatable, one thing is for sure – if women aren’t able to earn as much as men throughout their working lives, they need to be careful about how they save, manage and plan their money for later life. This is even more pertinent against the backdrop of life expectancy figures – life expectancy at birth is 83.1 years for women and compared to 79.5 years for men (Public Health England 2017).
I’m passionate about women having a strong grip of their finances. Whatever their financial situation, whether a high earner or on a more moderate income, having the knowledge and confidence to make financial decisions is something I think all women should have. Not only does understanding finances give you a greater chance of being able to utilise financial products and therefore save for a more secure financial future, it’s also empowering. I always advise clients, no matter their financial situation, to have their own money under their own control. Financial independence opens the door to options and choices – even if you choose to save for a rainy day or use the money for everyday living expenses.
Perhaps this is why I find the following statistics, as featured in the CII report, particularly alarming…
Only 37% of females aged 18-24 years claimed to feel very confident in managing their money compared with 48% of males (MAS 2015).
52% of women in their late 20s say they do not understand enough to make decisions about retirement savings compared to only 38% of men (ONS Wealth and Assets Survey 2012-14).
As we discussed in the previous part of this blog, we live in a generation where more women are achieving academically. So what is it that is causing this apparent mental block in understanding personal finances? In my experience, part of this appears to be an overhang from the days where men bore the legal responsibility for the family finances. Another factor seems to be the under-representation of women in financial services and how the sector has traditionally ‘turned off’ women by its focus on men (read our blog on this here).
Although this issue could be dismissed as trivial, it may actually prove to be a serious matter – particularly in relation to later life planning and pensions.
Women can no longer be ignored as earners or treated as ‘bystanders’ in financial planning. Now that women are finally getting an equal seat at the boardroom table, the new challenge is to decide how to make an impact, because the current system doesn’t suit women’s needs. Women and men need to collaborate to push support for a new model, where women play an equally significant role.
We’ll look at this issue in the next part of the blog – particularly focusing on pensions; the huge disparity between the average pension pots for women and men and how this needs to be addressed.