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The high cost of living continues to bite Britain’s pension savers. But for women especially, it appears to be having an even bigger impact on their financial futures.
This is one of the key takeaways from Standard Life’s Retirement Voice 2023 report, which revealed that the ongoing economic uncertainty is disproportionality affecting women’s financial wellbeing. And as a result, the gender pension gap is getting even wider.
How financial uncertainty is impacting women’s financial wellbeing
Our latest Retirement Voice report showed that:
- Just 35% of women feel positive about their financial situation, compared to 49% of men
- The majority (60%) of women are stressed about their finances because of the cost of living crisis
- Fewer women than men are confident that they’re saving enough for retirement (30% vs. 46%)
These findings highlight that financial uncertainty and stubbornly high costs are reinforcing the barriers that many women already face when saving for their future.
Indeed, Phoenix Insights’ Caught in a Gap report, created in partnership with the Institute for Employment Studies (IES), talks about several existing factors that hinder women’s ability to save for retirement – and worsen the gender pension gap as a result:
- Women’s finances are already disadvantaged by the gender pay gap. This means they’re more likely to pay less into their pension
- Life stages such as motherhood, divorce, and menopause can disproportionately affect a woman’s earnings and ability to save
- Women are more likely than men to earn below the auto-enrolment threshold because they’re unable to engage in full-time work across different life stages
It’s clear that 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 for today, and for their future.
Here are a few ideas to help your clients to get started:
1) Encourage financial planning with engaging tools
Our research shows that women who spend more time planning are more confident making financial decisions compared to those who don’t plan at all (63% vs. 41%). They’re also more positive about their financial situation (42% vs. 19%).
Your clients can make it easier for members to plan for their future by providing engaging tools and content that simplify complex concepts.
They could start by signposting to online resources like MoneyHelper, which cover a range of topics including pensions and planning for retirement.
If your clients are with Standard Life for their workplace pension scheme, members can access tools to help them budget for today and tomorrow through Money Mindset. Plus, thanks to open finance technology, Money Mindset allows members to connect all their financial accounts in one place – giving them total visibility of their money.
2) Communicate pension information clearly and regularly
Our Retirement Voice 2023 report revealed that women feel more comfortable in their understanding of financial products than they did in 2022 (48% vs. 43%). But it’s still a drop from 2021, where 50% said they feel comfortable.
To help close this gap, it’s vital that employers make pension information as clear as possible.
For instance, your clients could signpost members to financial education content that’s simple, easy to digest, and targeted to their specific life stage or financial situation. Standard Life workplace pension scheme members can get content like this at their fingertips through Money Mindset.
Your clients can also support members by sending communications at regular intervals, not just at the induction stage. This could encourage members to check in with their pension plan proactively and see if they need to take any action.
Ultimately, everyone’s understanding of financial products is different. So it’s important that all communications are personal, relatable, and engaging. Standard Life’s financial education team work with employers to understand the different needs of their members, and create tailored communications that reflect what information they want and in which format – be that via email, print, or face-to-face.
3) Provide targeted support at major life stages
Phoenix Insights’ Caught in a Gap report found that the gender pension gap widens at major life stages such as motherhood, divorce, and menopause. To help, employers could provide targeted support at each stage to help women feel more in control of their money.
For example, those who take a career break – perhaps to start a family – may be unaware that they’ll lose out on pension contributions during the time they’re on leave. To promote awareness, your clients could create a communications campaign to help members decide if they should make extra contributions when they return to work.
For members who work part time, some may not earn enough to be auto-enrolled into their workplace pension scheme. Again, boosting communications to this group could help encourage them to opt in manually – which could have a positive impact on women’s finances in the long term.
Ultimately, by providing tools, content, and guidance that’s tailored to support women – and delivering these at multiple touchpoints throughout their career and different life stages – your clients can help give their financial wellbeing the boost it needs.
For more insights on financial wellbeing, including resources on how to support members, visit our Financial Wellbeing hub and read our articles.