3 min read
International Women’s Day (IWD) - held on 8th March each year - celebrates the social, economic, cultural, and political achievements of women. It is an opportunity to see how far women’s rights and gender equality have come, but it also highlights that work still needs to be done.
Women face some unique challenges, particularly around economic empowerment. Some key issues include:
• The Gender Pay Gap: Women often earn less than men, which can impact their ability to save and invest.
• Career Breaks: Many women take career breaks for childcare or other family responsibilities, which can lead to lower pension contributions and may reduce overall financial stability
• Longer Life Expectancy: Women generally live longer than men, meaning they need to plan for a longer retirement period. According to the national life tables released by the Office for National Statistics (ONS) following the Census of 2021, life expectancy in the UK between 2018 to 2020 was 79.0 for males and 82.9 for females1.
• Pension Inequality: A 2024 Women and Retirement Report by Scottish Widows2 shows that women have less pension and other long-term savings, leading to a lower income in retirement. The report shows the average projected pension pots that we are on track for at retirement in today’s money are £151,000 for women compared to £281,000 for men. That said, over the past 20 years, the UK has made good progress in reducing the gender pensions gap. This achievement is attributed to consistent policy actions, evolving attitudes toward women's roles, higher employment rates for women, a narrower gender wage gap, and an increase in women's pension savings2.
• Investment Gap: Historically, women have been less likely to invest in the stock market than men, and this trend appears to be continuing. According to the Scottish Widow’s report, the investment gap is biggest for young women with only 34% of women aged between 18-24 saying they invest outside of pensions, compared to 64% of men of the same age2.
• Financial Confidence: Many women feel less confident about managing their finances. Traditionally men have been encouraged to take the lead in financial matters, while women may have prioritised other responsibilities such as caregiving.
• Perception: The financial services industry has historically been very male dominated. As a result, many women may perceive financial advice as being more geared towards men or may believe that their financial situation doesn’t warrant professional assistance. Whilst there has been a small increase in women entering the advice industry, industry professionals agreed the pace was slow3.
A lack of structured financial planning may lead to:
• Inadequate retirement provision. As women typically have lower retirement savings, they may risk outliving their savings or not having enough for a comfortable retirement if they do not seek proper financial guidance.
• Increased financial vulnerability. Women may be more vulnerable to the financial shock of job loss, divorce, or unexpected expenses if they do not have suitable plans in place to help them weather these challenges.
• Limited wealth accumulation. Women who do not actively manage their finances may struggle to accumulate wealth and achieve long term financial goals such as homeownership, education for their children or starting a business.
• Lost investment growth potential. Without professional guidance, woman may miss out on investment opportunities that could help them to grow their wealth over time.
• Reduced financial independence. Without financial advice women may rely more heavily on others for financial support reducing their sense of independence and autonomy.
Tailored financial advice for women
As outlined above, the potential consequences of not seeking financial advice can impact women’s financial wellbeing and their ability to achieve financial security and independence.
However, there is some comfort in knowing that there are now more female Wealth Planners and Advisers in the industry, creating more inclusive and accessible advisory services.
Tailored financial advice, from both male and female advisers, can be geared towards a woman’s unique needs, challenges, and aspirations, leading to improved knowledge, confidence, and greater empowerment. This empowerment will enable women to better take control of their finances, to build their wealth, and ultimately achieve their financial goals.
Sources:
1 05/04/2022 | UK Life Expectancy 2023 | UK Population Data
2 29/04/2024 | 2024 Women and Retirement Report | scottishwidows.co.uk
3 20/02/2024 | Number of female advisers grows by just 2% | FT Adviser
Please note: This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The content was accurate at the time of writing. Whilst information is considered to be true and correct at the date of publication, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the article.
FP2025-121