International Women’s Day is the global day of celebration to recognise the social, economic, cultural, and political achievements of women and to promote gender equality.
Here, Verona Kenny, managing director intermediary, 7IM, highlights the gender divide which she argues is unacceptably pronounced in retirement planning and need to be swiftly changed.
I must admit that I am bored of talking about the gender gap, but when the gender gap is embedded in retirement planning we need to do something and do it quickly.
The gender divide manifests in many ways across all facets of life. I would argue that it is unacceptably pronounced in retirement, and critically in retirement planning. And it shows.
So how can we support women in achieving their retirement goals? First of all, we need to acknowledge the extent of the gender divide at retirement.
It is a widely known fact that women live longer than men on average; according to the Office for National Statistics (ONS), it is a four-year difference. This needs to be factored in and addressed by us as an industry.
We commissioned a piece of research from Cicero/amo of 505 fully or semi-retired UK adults aged 55 or over, to understand the issues facing retirees and how they differ based on gender.
The findings show a clear divide. When asked how confident respondents were that their savings would enable them to maintain a lifestyle they would consider comfortable through retirement, 52% of men said they were extremely comfortable, and only 36% of their female counterparts said the same. This is not a good place for us to be starting from or, more importantly, starting retirement from.
Knowing that women live longer than men on average, combined with the fact that few women at or nearing retirement are confident about their savings, is alarming to say the least.
The same number of women (36%) said there was not enough choice at retirement, or felt unsure, about the retirement solutions available to them, compared with 21% of men. Our research also revealed that, from the population that retired later than expected, 61% of women said they stayed longer in employment because they enjoyed working and their working lives, compared with 48% of men. On the other hand, 14% of women retired later than anticipated because they were anxious over their retirement income needs and savings, compared with only 10% of men.
We need to know these disparities exist so we can tailor what we say and what we emphasise when we communicate with male and female clients.
We need to get it together and collectively ensure we offer genuine, meaningful flexibility enabling advisers and paraplanners to tailor solutions to their clients’ particular circumstances, including gender.
In addition, inclusive financial planning should extend well beyond heterosexual couples. We need to expand this to planning for divorced, single individuals, and same-sex couples.
The world is changing. Fast. However, our industry could at best be described as a laggard when it comes to reacting not only to the challenges of the gender divide, but to the changing shape of society as a whole.
We need to walk the talk when it comes to providing tailored support for those who, regardless of their gender, are married or remarried or divorced, those who choose to remain single and those who do not have a choice, those who have and don’t have children, those who have same-sex partners or opposite-sex partners.
Clearly as an industry, we need to act to address the issues arising from a gender divide, but it might be more efficient to start with a blank sheet of paper and reconsider our overall approach. To take into account the make-up of society we live in today demands flexibility, with a robust and coherent outcome. This, I believe, is key to delivering the best possible outcomes for all.
Adapting to new environments has always been a challenge for the industry, but it’s a challenge we need to get better at responding to.
Social norms of previous years are no longer the social norms of today, and failing to meet the diverse needs of clients of today (and tomorrow) means also failing to help people at and in retirement as an industry. Understanding the gender divide at retirement is just the start and I would hope to see that understanding broaden ensuring flexible, robust solutions are available to everyone.
