The ongoing cost of living crisis 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 report (2022). Surveying almost 6,000 British people on their views on retirement, the findings reveal that the economic crisis is disproportionality affecting women’s financial wellbeing, including their financial positivity levels, 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 impacting women’s financial wellbeing
Standard Life’s Retirement Voice report found that:
- 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% vs. 67% in 2022 and 57% vs. 70% 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 to men (33% vs. 50%).
- The gender gap in retirement outlook has become wider. In 2022, women said they think they’ll be able to fund their retirement for four years less than men. In 2021, that gap stood at 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 (2022), created in partnership with the Institute for Employment Studies (IES), details several existing 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 be contributing less to their retirement savings.
- Life stages such as motherhood, divorce, and menopause can disproportionately affect a woman’s earnings, which can further impact 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.
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 ways that your clients could provide help and guidance to their members:
1) Encourage financial planning with engaging tools
Just 21% of women do a great deal of planning for retirement, according to Standard Life’s Retirement Voice report. And yet the benefits of planning are clear. Women who spend more time planning are more confident making financial decisions compared to those who don’t plan at all (58% vs. 52%) and more positive about their financial situation (40% vs. 33%).
Your clients can help make it easier for 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.
For instance, 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 and regularly
In 2022, women felt 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, your clients 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.
Your clients can also support members by sending communications at regular intervals, rather than just at their induction stage. This could encourage members to check in with their pension plan proactively, helping to increase their understanding and awareness of how their pension savings are performing, and if they need to take any action.
Ultimately, everyone’s understanding of financial products – and how they absorb that information – is different, so communications need to be 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. Your clients can help by making interventions at each stage that could help women feel more in control of their money.
One such intervention could be 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 who are trained on how to handle difficult conversations. We also partner with Samaritans so that our staff can learn about active listening from the experts.
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 and tools, visit our Financial Wellbeing hub and read our articles.
