How to build a financial wellbeing strategy that supports women’s needs
For every £1 men earn in the UK, women earn about 85p. 40% of women work part time compared to 12% of men. 86% of single parent families are headed by women.
These are just some of the societal factors that can have some impact on women’s financial wellbeing. The Chartered Insurance Institute’s research on insuring women’s futures identified six “moments that matter” – pivotal points where the decisions that are made have a significant impact on their financial future.
Thinking about how you can support your employees’ important life events can be an effective way to design any financial wellbeing strategy, and this approach can be extended to consider the moments that matter specifically for women. Some of these happen before people even enter the workforce – the topics you study at school or college, the career you choose – but some coincide with working life:
- Starting work and, in particular, returning to work. This is a crucial time to establish or maintain good financial behaviours and build up some degree of financial independence.
- Motherhood, and the decisions made during motherhood, including childcare responsibilities and returning to work, will affect future financial wellbeing and resilience. ONS data shows that the gender pay gap is almost non-existent when women first enter the workplace, but the gap widens sharply by the age of 40 as flexible working and career decisions have an impact.
- Relationships. Financial decisions made in relationships can have a big impact on women’s financial status and wellbeing. Credit Karma recently reported that average credit scores for women were 652 compared to 705 for men, which can lead to £000s in extra interest costs for women over a lifetime. Contributing factors include nearly a third of women having some or all of their financial products in their partner’s name. In addition, 75% of people using buy now pay later products such as Klarna are women; these products don’t have a positive impact on credit scores but can have a negative one if payments are missed. Decisions at the end of relationships are also crucial. Scottish Widows research found that 71% of divorcees didn’t discuss their pensions during divorce proceedings, leading to women missing out on an estimated £5bn per year in pension settlements, further widening the pension gender gap.
A financial wellbeing strategy that supports women’s needs should help your employees make good financial decisions, particularly at the moments that matter.
Central to this will be some form of financial education which encourages employees to understand their financial options and make it easier to make good decisions, especially the particular issues impacting women’s financial wellbeing. This could extend to providing access to specific guidance or advice.
People do find it difficult to talk about money, and research has indicated that some women may feel even less financially confident than men. Therefore, consider using a communication style which resonates with your female employees, seeks to normalise money management, and inspires the confidence to tackle taboo issues like money in relationships or divorce.
You should also consider if additional products and services could benefit women at the key points in their lives. For example, you could provide a workplace ISA alongside your pension scheme to enable women to build up a flexible savings fund to support different earnings patterns due to motherhood, as well as saving for their retirement? Initiatives like this can be done alongside any broader HR policies and practices which support these issues.
By building a financial wellbeing strategy that considers the moments that matter for women alongside moments that matter for everyone, you will be able to support women’s needs as well as those of your wider workforce.
Anne-Marie Ayre – Principal and Benefits Consulting Leader and Mark Pemberthy -Head of DC and Wealth