Three quarters (75 per cent) of women say they don’t plan to see a professional financial adviser about retirement, compared to 65 per cent of men. Of those already retired, women are also less likely than men to say they have taken financial advice (21 per cent compared to 29 per cent).
The main reason for this is slightly different for men and women, which may make it easier for advisers to find ways to target them accordingly. While the top reason for not seeing an adviser among men is planning to decide based on their own research, for women the main reason is not thinking they have enough money saved to make it worthwhile.
This would suggest that advisers need to think about how they can both demonstrate the value of advice and make it more affordable.
What is happening already?
While issues like equal pay and the gender pay gap are issues that government and employers must work to address, we believe there are other tactics that could go some way to address the pension gender gap.
Much of this problem is around getting more people – and particularly women – involved and engaged in pensions. Auto-enrolment is already helping here and should continue to do so. Recent figures from the Department for Work and Pensions (DWP) show that take-up of workplace pension saving in the private sector has increased from 40 per cent of eligible women in 2012 to 73 per cent in 2016.
Figures for men increased from 43 per cent to 73 per cent over the same period, and DWP also estimates that by later this year 3.6m women will be newly saving or saving more as a result of auto-enrolment.
The review of auto-enrolment last year also set out how the government plans to improve opportunities for part-time workers with multiple jobs to save. DWP said this would significantly improve incentives for the 632,000 women with multiple jobs.
This is a clearly a positive move, and auto-enrolment has undoubtedly been a success in getting more people saving for retirement, but we know that contribution levels are still not high enough to ensure that people can live comfortably in retirement.
Part of this will be down to lack of knowledge but it would be wrong to say that the issue of low understanding, awareness and engagement is solely confined to women.
Increasing contributions and numbers taking advice
While women are more likely to have smaller pension pots, we know that millions are not saving enough for retirement across both genders. Part of this issue is down to people not being able to save more, but it’s also down to people not knowing how much they need to save to be able to live comfortably in retirement.
