With the first International Women’s Day of the new decade being celebrated this week, it seems an appropriate time to reflect on how far the finance industry has come to make financial services more accessible and fairer for all.
But it is also a time to question why it still feels like we are facing unnecessary obstacles to being truly inclusive.
I have worked in the pensions industry for more than 30 years and thankfully there has been a notable change to the demographic of my colleagues. As I look around organisations like Now Pensions, our parent Cardano and beyond, I see many talented women – the slow but sure shift from a sea of dark suits to something a little more diverse and representative is encouraging.
And although we might want to be wary of using quotas, I must admit they have pushed companies in the right direction to increasing the diversity of workplaces and boardrooms – it is the old ‘what gets measured gets done’ thing.
These issues are so fixable, and it is time we took real action to remove the obstacles to women getting an equal shot at a decent income in retirement
On the consumer side of things, progress has taken a more definitive shape with the introduction of auto-enrolment – arguably the biggest shake-up in the pensions industry.
Recent figures from the Pensions Regulator show that 10.2m people have been auto-enrolled since the scheme began in 2012. This is clearly an indicator of its resounding success, since most of these people would not have been saving into a workplace pension prior to this.
AE still has long way to go
But the job is not finished. Nearly the same number – 9.56m – have still not been enrolled. Many of those are women where the eligibility rules simply do not allow them into the auto-enrolment ‘club’ – the doors are simply shut to them.
Take the £10,000 earnings threshold for starters. Nearly 2m women simply do not earn that much. So today, almost a decade after the introduction of auto-enrolment, 50 per cent more women than men are heading for a retirement without any private pension savings.
A large part of the reason women do not earn enough is because they work part-time: in fact, three-quarters of part-time workers are women. And that is because they take on the lion’s share of caring responsibilities – either for young children, older relatives, or sometimes both.
With the average cost of childcare now more than the average cost of a mortgage, getting back into the labour market can be nigh on impossible for many.
Without urgent action the gender pensions gap – which currently sees a woman’s pensions wealth at 60 lag more than £100,000 behind a man’s – will persist.
Yet these issues are so fixable, and it is time we took real action to remove the obstacles to women getting an equal shot at a decent income in retirement.
Pensions gender gap solutions are possible
We could start by removing that £10,000 earnings threshold and opening up the doors of auto-enrolment to more savers. At a stroke, that could bring around 1.4m more people into pensions – the major beneficiaries would be women.
Going one step further and ensuring that pension contributions are payable from the first pound of earnings could help increase women’s retirement wealth by 140 per cent, which would be enormously beneficial.
Last, but by no means least, we could recognise the enormous social service carers perform for society – nurturing the next generation and looking after our elderly – by introducing a family carer top-up.
This would be paid alongside national insurance contributions as a credit towards the state pension. It would be the single most effective thing government could do to tackle the gender pensions gap, helping more than 3m women carers, and 300,000 men.
Although we have come a long way over the past 30 years, we have a lot further to go.
The government has committed itself to “levelling up” the country and the economy. That is to be lauded. So let us not forget that, while we have come a long way, there is still a lot of levelling up to be done to ensure that women have the same opportunities to save.
Removing the obstacles that are creating unequal opportunities to save would seem like a good starting place.
Joanne Segars is chair of trustees at Now Pensions
