Women’s Risks in Life
The old saying “Life begins at 40” has always felt a bit hollow, but for anyone who needs evidence that getting older is bad for you, the Chartered Insurance Institute (CII) has some news.
The CII’s new report “Women’s Risks in Life: An interim report into risk, exposure and resilience to risk in Britain today”, shows that women earn less than men, feel more financially insecure, receive smaller pensions and have lower pension savings, need care for longer into old age and generally face far greater hardship as they get older.
The health and social risks that women face are also significant. They do the vast majority of unpaid care for both children and adults, more likely to report suffering from mental health conditions, face more risk of domestic violence and other forms of abuse.
The report makes grim reading, but it manages to lay out the scale of the problems that Britain faces due to inequality and what we can do to tackle them. We need to focus more on pensions and savings and find ways of supporting women so that they are provided for in old age, and the insurance industry should create products that meet the needs of women to mitigate these risks.
The gender pay gap
The pay gap is the biggest headline. It has reduced from 17% in 1997 to 9% for women in full time work today, but the gap is narrowing mostly for younger women who have not started families. Women and men aged between 22 and 29 earn the same, but women in their 40s still earn 12% less.
Women of all ages tend to work part-time – 42%, compared to 13% of men. They are more likely to be on temporary contracts and 3.4% of women are on zero-hours contracts, compared to 2.4% of men.
Pension pot provisions
The pay gap and insecurity of income translates into pension provision, something that people should do when they are younger, but tend to focus on more as old age approaches. In their late 30s when the pay gap broadens, men have 60% more savings than women. Men build pension pots that are five times as much as women, on average.
When women and men retire at 65, a woman can expect to pay £70,000 for her care, while men pay £37,000 – a function of women’s longer lifespans. In the southeast, this is more pronounced, with an average of £186,000 needed to pay for care home accommodation.
Anyone thinking this is “just” a women’s issue should reconsider, the CII says. Sian Fisher, the CEO of the CII, believes the risk for society as a whole of ballooning social care for elderly women will be unsustainable if we keep going as we are now. Women need more help to prepare for the risks they face in later life, particularly as the systems that have historically supported people such as social care, extended families and the wider community, are in decline.
At gpfm, we offer confidential wealth management and retirement planning services to ensure that everyone can give themselves the very best opportunity for a high quality of life. Speak to one of our financial planners today.
This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.