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Globally we are making significant progress on the gender stage. This year 25.4 million viewers1, watched the Women’s World Cup final. Movements such as #Timesup and #Metoo have been a positive catalyst for change in the fight for gender equality and this year’s International Women’s day focused on #balanceforbetter. The very concept of International Women’s day on a global stage is a victory in itself.
Carol Rafferty, Policy Manager
Despite the undeniable force behind these movements women are still not equal to their male counterparts. From the labour market, to education and health, women are still considerably underrepresented and financially worse off. This underrepresentation has a fundamental impact on economic growth. We know that the global economy would grow by an estimated $28 trillion by the year 20252 if women participated in the economy to the same degree as men and, in the UK alone, reducing gender gaps in labour market participation could increase the size of the UK economy by £55 billion3.
In 2015, the leaders of 193 nations made a pledge through the Sustainable Development Goals (SDGs) to end gender inequality in all forms by 2030, highlighting gender equality was a priority for the world’s leaders. However, according to a PWC’s Women in Work Index the UK’s gender pay gap will not close until 2041, with The Fawcett Society stating it won’t close for another 60 years4.
Of the 1.7 million people who are financially struggling in retirement in the United Kingdom 70% of them are women and we know that at age 60, a woman’s pension’s wealth is 1/3rd of an equivalent male5. Not only will many women not be able to afford to retire, which could impact work opportunities for younger generations, but, the potential impact on government funding will be extensive as many women simply won’t have enough money to support their daily needs in later life.
On 3rd July, the Minister for Women & Equalities, Penny Mordaunt, set out her vision for gender equality in the UK with the publication of ‘Gender Equality at all Stages: A Roadmap For Change’. The roadmap is a welcome report, clearly identifying how half of the population, on average, earn less throughout their lives, which unsurprisingly translates to an even larger financial gap at retirement.
The report demonstrates key points in the female life course where cultural and societal norms may have influenced financial resilience. Despite achieving higher educational qualifications from school women tend to gravitate towards certain types of work which historically have been lower paid. According to the Government Equalities report, by reducing the gender gap in labour market participation in science, technology, engineering and maths, qualifications and wages could increase the size of the UK economy by around 2% or £55 billion by 20306.
The gender pay gap dramatically increases at the point where women have families, with women historically taking time out of work to care for their children. This can have consequences on career progression and retirement income and is increasingly prolonged as women then return to work on a part-time basis. Women are over three times more likely to work part-time than men. According to ONS data they estimate that the value of unpaid childcare and adult care to the UK economy is £411 billion per year.
On the flip-side, historically, men have not always had the opportunity to work flexibly or part-time. The 2017 British Social Attitudes surveyed a selection of men and women and asked respondents to consider a couple who have just had a child, both worked full time and earn roughly the same amount. Both were asked how paternal leave should be split, 30% felt that paid-leave should be split evenly between both parents, this rose to 48% of respondents aged 18-247.
There has certainly been a rise in women’s labour market participation over the last 30 years and with that comes a need for policy measures that seek to support family and work conflicts for both men and women, including childcare provision, improvement in part-time working conditions, divorce and separation rights and parental leave.
Employers, employees and key influencers all need to play their part. Government, The Chartered Institute of Insurers, the Government Equalities Office, The Association of British Insurers and a host of other bodies across the UK are collectively highlighting much needed awareness of inequality in the UK and the financial impact this has on society as a whole.
Across industry, groups such as Insuring Women’s Futures, Yes she Can, UN Women and Women of the World have been collaborating to make real change, not only in policy terms, but in how employers can engage with their workforces to bring much needed awareness to their financial wellness.
The Insuring Women’s Futures campaign will launch their key recommendations in November 2019. The collective recommendations will take a much needed step forward in supporting and protecting women’s financial lives across all generations. These working groups are not only making positive steps to improve financial resilience for women but encouraging industry to make more positive steps to a more balanced society for all.