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The moments that matter for women: part 1 – education and work

Posted by Anna Sofat on 20 March 2018

I recently read a report – Securing the Financial Future of the Next Generation.

Published by the Chartered Insurance Institute (CII) as part of their Insuring Women’s Futures programme, the report has been produced to coincide with the 100th year anniversary of women first gaining the right to vote; looking at how things have changed over the past 100 years in terms of women’s exposure to risk.

The report is highly comprehensive and takes an in-depth look at the patterns and risks in society that are disproportionately borne by women.

As a financial planner specialising in assisting women, this report is particularly pertinent. As part of its analysis, the report identifies 6 Moments that Matter; 6 key stages in a woman’s life that can give rise to high exposure to particular ‘perils and pitfalls’.

These moments are broken down in the report as follows:

  1. Growing up, studying and re-qualifying
  2. Entering and re-entering the workplace
  3. Relationships: making and breaking up
  4. Motherhood and becoming a carer
  5. Later life, planning and entering retirement
  6. Ill-health, infirmity and dying

There are a number of key statistics that stand out and in this part of the blog, I’ll be looking at the moments that affect women’s earning potential…

Access to further and higher education is one area that women have fully embraced over the past 50 years or so.

Starting out in life, women have just as much opportunity to higher education as men – in fact statistically, even more so, with 51% of girls and 42% of boys going to university (Hillman and Robinson 2016). From overall figures, women account for 55% of all fulltime students (HESA 2017h), and 57% of postgraduates (HESA 2017b). And just as we see at GCSE and A levels, women outperform men at University, with 73% of young women and 69% of young men achieving a 2:1 or higher (HESA 2016).

So with more females attending University and attaining a good grade, how is it that the gender pay gap exists? 

If we take a look at the figures, it appears that initially, there is no difference in the pay of men and women on average in their 20s. However, by their 40s women earn 13% less than men and by their 50s, 16%. (Daily Mail report 2015).

The good news is that the gender pay gap appears to be lessening - women in full-time work earned 17.4% less than men in 1997, by 2015 this was 9.4% less. Yet even at this pace, the gender pay gap is not set to close until 2050 (CII 2016). And against a backdrop of what we know about women’s attainment in education, is it acceptable that a pay gap exists at all?

How and at what point does the gender pay gap emerge?

Two key issues identified in the report pertain to the type and manner of work women are undertaking.

For example, it’s highlighted that women make up only 17% of engineering, technology and computer science undergraduates and 37% of maths (HESA 2017c). These courses often lead to better paid jobs.  This might go some way to explain why the London School of Economics show that women who take out a student loan to attend university, due to lower earnings throughout their careers, are less likely to repay their student debts within the 30-year timeframe (London Economics 2016).

Similarly in apprenticeships, male apprentices earn on average 21% more than female apprentices due to the roles and sectors they typically enter. (Skills Funding Agency 2017).

Whilst I accept that some of the issue must come down to career choice, it cannot explain all instances – there are plenty of professions where males and females work alongside other yet are not paid equally.

Which brings us to another major issue - working patterns.

Taking maternity leave or adoptive leave is a time that women have earnt over their careers. Becoming a parent is life changing and all of a sudden, your child/children become the most important thing in your life. Perhaps this realisation is the reason that 61% of mothers opt for part-time work after having children (Chanfreau et al 2011). Whilst this is statistic is framed as a ‘choice’, it isn’t necessarily a ‘free choice’ and it certainly doesn’t make women any less skilled or valuable as employees. Despite this, the greater propensity for women to undertake part-time work reduces their earning potential throughout their working life – with women working part-time earning 30% less than those that are full-time (ONS 2016g).

There are clearly still lots of issues around women, motherhood and the workplace. For example, when you look at professional women taking career breaks, it has been shown that 3 in every 5 who do so return to lower skilled jobs (PwC, 30% Club and Reuters, 2016).

There are a lot of statistics to digest here but the picture that emerges is clear – we have women achieving and attaining better during their education and early careers, but their earning ability compared to their male counterparts falling as their careers become more established.

So with women having less earning power than men, ensuring they have the knowledge and access to manage their finances is vital.

In the next part of this blog series, we’ll look at how this, unfortunately, doesn’t seem to be the case and what we need to do to address this pivotal matter.