There is a long history of financial inequality between men and women, yet the disparities in the rights of both were not legally enshrined until more recently than you might think.
Just over half a century ago, before 1970 and the passing of the Equal Pay Act, women in the UK were not entitled to equal pay for the same work as their male counterparts.
It would take another five years until women would even be allowed to open a bank account in their own names, first becoming able to do so in 1975.
Of course, the push for equality has marched on and women now do have the same legal rights and protections as men.
However, despite this progress, there are still areas of wealth where women are significantly financially disadvantaged, creating a notable gender finance gap. From pay and pensions to the division of assets during a divorce, it can be challenging for women to build wealth in the same way as men are able.
Fortunately, understanding these challenges can make it easier to find solutions and tackle them head on.
So, read on to discover some of the areas where women may face financial difficulty, and how advice can help close the gender finance gap.
Women can be disadvantaged in terms of pay, pension, and on divorce
Before looking at how useful expert advice can be in tackling financial disparity, it’s worth being aware of the areas where women may be most disadvantaged.
First and foremost, although the Equal Pay Act prevents employers from paying different amounts to employees on the basis of gender, women still earn less than men.
There are many reasons for this phenomenon, known as the “gender pay gap”, often stemming from the traditional gendered roles of men as breadwinners while women remained at home. These systemic issues mean that, despite legal protections, women may still be overlooked for senior roles, and instead can find themselves left in low-skilled jobs with lower pay.
This can be compounded by caring responsibilities. Whether caring for children or parents and other elderly family members, working women are more likely to provide unpaid care than men in every age group up to 75-79, data from Carers First shows.
The gender pay gap is actually at its lowest since reporting was first enforced in 2017, the Guardian reports. But although the median pay gap fell to 9.1% in 2023/24, 78.4% of companies and public bodies still pay men more than women. In effect, this essentially means that women earn 91 pence for every £1 a man earns.
This no doubt impacts the next area that women can face challenges with: pension saving. According to data from the House of Commons Library, the gender pensions gap was most recently measured at 35%, using data from 2018-2020.
In practical terms, that means women have 35% less private pension wealth than men, largely owing to their lower pay and the time they may spend away from work with caring responsibilities. This puts women at risk of not having sufficient retirement savings of their own in later life.
This also contributes to the issue of divorce in turn. As data published by Legal & General shows, divorcing women are likely to have just £23,000 in their pensions on average, compared to £60,000 for men.
Considering that pensions are often the biggest financial asset that some people have, it is also concerning to see that only 30% of divorcing couples include pensions in their divorce settlements, as the Standard reports. That translates to between £2 billion and £4 billion a year that aren’t discussed, with women ending up far worse off.
Legal & General also note that women face a bigger hit to their annual household income on divorce, falling by 41% compared to just 21% for men.
3 simple ways we can help you close the gender finance gap
As you can see, women face a difficult financial landscape. This is where financial advice and planning can make a huge impact, helping you plan for the future and navigate these challenges.
Below are three simple ways that our expert advice can support you in closing the gender finance gap.
1. Creating a financial plan based on your goals
A core tenet of financial planning is basing your decisions around your future goals – that is, what type of lifestyle you want to live. After all, it’s far more valuable to build wealth if you know what you’re saving toward.
So, we’ll begin by asking you about your goals for the future and what you want to achieve in later life. Whether it’s to retire early, embark on a world cruise, or create a nest egg for your loved ones, you will have personal targets that you want to achieve.
Defining these at the outset can then allow you to make strategic choices with your wealth that put you on track toward these ambitions.
2. Designing a tailored strategy that helps you build wealth
Once we have an idea of your goals, we can work out what you would need to live your ideal lifestyle. Then, we can design a bespoke, tailored strategy for you to save and invest your wealth.
We can look at the wealth you have now and project what you might have in future, based on assumptions such as investment returns, inflation, and even personal choices such as whether you’ll take a career break.
From here, we can find methods that can close the gender finance gap that might affect your ability to create the pot you need for the future.
For example, if you want to or have taken a career break, perhaps to raise children or care for a family member, you may have had to stop making pension contributions.
To combat this, if you have a partner who is continuing to work full-time, you could suggest that they make pension contributions on your behalf. That way, you can both continue building a retirement pot, even while you are not working.
We can help you find and implement strategies like these.
3. Reviewing and refining your plan as your life changes
Crucially, we’ll be with you on an ongoing basis, acting as a partner and sounding board. As you progress through your life and career, we can monitor your financial situation and ensure you remain on track toward your targets.
Whether your ambitions remain static, or you change your mind about what you want out of life, we can review and adapt your plan so that it reflects where you are now and what you want in the future.
No matter what happens, we’ll be by your side, offering invaluable guidance and support.
Get in touch
If you have any questions about how you can work to close the gender finance gap, speak to us now. Get in touch by emailing hello@fingerprintfp.co.uk or calling 03452 100 100.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
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