IT MAY be a century since women got the vote, but true financial equality is still years away as they continue to trail men on pay, pensions and savings.
As millions of families mark Mother’s Day some may feel they have little to celebrate as the gender pay and pension gap remains alarmingly wide.
Motherhood may be a gift, but it also hits career and pension prospects, and many women retire in poverty as a result.
International Women’s Day, celebrated last Thursday, has also thrown a spotlight on how much still needs to be done to put women on an equal financial footing.
However, women must also take practical steps to secure their own financial future.
Mind the gap
Few would now argue against the drive towards gender equality, but it has made life harder for women in one respect.
The days when they could claim the state pension five years earlier than men at 60 are over, with the age being steadily lifted to 66 for all by 2020, and 67 by 2028.
This is a blow for an estimated 2.66million women born between April 1953 and April 1960, who had not expected to work so long.
Some have lost more than £40,000 in state pension and lack the savings to plug the gap. The Women Against State Pension Inequality (Waspi) campaign, is highlighting this unfairness but has been repeatedly rebuffed by the Government.
Tom Selby, senior analyst at investment platform AJ Bell, said ministers are balking at the cost: “The Liberal Democrats suggested all those affected should be paid a tax-free sum of £15,000, but this would cost the taxpayer a whopping £39billion.”
Other suggestions such as giving women access to a smaller pension at an earlier age were also snubbed.
A record 4.2million women are already working well into their 50s and 60s, double the number just 20 years ago, and this figure is set to rise.
Saving less
To make matters worse, women have far smaller pensions, with £53,000 in the average workplace scheme, less than half the male average of £120,000.
Female workers are also twice as likely to have less than £5,000 in their company pot, according to a report from Close Brothers Asset Management and the Pension and Lifetime Savings Association.
Jeanette Makings, head of financial education at Close Brothers, said half of all women feel unprepared financially for retirement, compared to just a third of male workers: “Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available to them.”
Separate figures from Pension Monster show that women’s overall retirement savings are also far lower, at an average of £70,000 against £192,000 for men.
Auto deficiency
The state-backed auto-enrolment scheme has been a success in lifting the proportion of women saving into a workplace pension from 40 per cent in 2012 to 73 per cent in 2016.
However, Aegon head of pensions Kate Smith said too many women are still excluded: “To be auto-enrolled, employees must earn £10,000 a year from a single job, but too many women are excluded as they earn less than that.”
Auto-enrolment does not allow for people with multiple jobs to combine their earnings.
Smith added: “Women are more likely to have multiple jobs, so lose out even if their earnings total more than £10,000.”
No wonder young women are anxious about the impact that starting a family will have on their career and pension prospects.
Almost half of new mothers felt overlooked for promotions and special projects even after returning to work, according to a report from PwC.
While more employees now offer work-life balance and flexibility programmes, women fear that joining can hit their career.
Lower earnings and greater childcare responsibilities mean women are also more likely to end up in debt, making up almost two thirds of the 8.8million Britons who are struggling financially, according to the Money Advice Service.
Self help
Helen Morrissey, personal finance expert at insurer Royal London, said women need to take action to improve their financial position: “New mothers must ensure they accumulate National Insurance credits towards their state pension.”
Auto-enrolment may not supply a large enough pension on its own.
“Resist the temptation to opt out and look to top up contribution levels wherever possible,” she added.
Women should also consider tax-free savings options such as Isas, which men are also much more likely to have.
Cohabiting risk
Finally, women have to do it for themselves, Morrissey said: “It can be tempting to rely on your partner if they earn more than you, but how would you cope if you were no longer together?”
The growing number of women who choose to cohabitate rather than get married are in a precarious position because they have few financial rights, even if they live together for years and have children.
“If you split up or your partner dies, you could be left with nothing. It may not sound romantic, but they should consider setting up a cohabitation agreement,” she added.
Flowers and gifts are a great way to mark Mother’s Day, but financial fairness would ultimately go a lot further.