Women are underinvesting in pensions and investments products, according to new research.
The research, conducted by law firm Pinsent Masons and The Fawcett Society, found that, although women are increasingly taking household financial decisions, they are not investing in their pensions and other investment products.
The study showed that the reality of women’s lives means that the financial risks they face are both numerous and complex. Women face factors such as a lower starting salary; a wider pay gap; having to take time out to care for children or relatives; unequal split of assets and loss of income after divorce; childcare costs; and higher prospects of living with severe health conditions.
Despite these risks, the report found that women are underinvesting in pensions compared to men, creating a ‘gender financial security gap’.
This gap often means that the inequalities women experience during their working years are perpetuated and exacerbated in later life, and can put women’s financial independence on the line.
The Fawcett Society and Pinsent Masons are now calling for the UK’s financial services industry and policy makers to seize the opportunity to better engage female consumers.
They are also urging for the creation of new products and a change in marketing to begin to tackle the gender financial security gap.
Speaking about the results of the research, Sam Smethers, Fawcett Society Chief Executive said, “Women are both carrying more risk throughout their lives and also less able to take action to address those risks.”
“This is partly because women earn less and also tend to prioritise other things over their own financial security.”
“But even when women are earning enough to save or invest, the financial information available to them and the choices they are presented with don’t appear to work for them.”
“The financial services industry has a huge opportunity here to both put that right and help women to achieve financial independence at the same time.”
Carolyn Saunders, Head of Pensions and Long-Term Savings at Pinsent Masons said, “Women’s wealth is on an upwards trajectory and more financial decisions are being taken by women than ever before.”
“Some organisations are already recognising and engaging with this change but on the whole financial products continue to be developed and marketed in much the same way as they always have been.”
“Pensions and investment products need to work harder for women.”
“Financial service providers and policy makers need to help change the perception that finance is a man’s world, boost women’s confidence in their financial capabilities and develop products and advertising that speak to women.”
“For the financial institutions that recognise and engage with this change there is significant opportunity to make a positive impact on society while opening up a market which is arguably underserved.”