International Women’s Day is here once more and this year the theme is Balance for Better. This provides the opportunity to shine a light on the gender inequality that still exists today. The sociologist in me welcomes this as it is a great way to remind people that we do not have equality. That our society is still patriarchal and we need to still be striving for better balance.
I have taken this from the IWD website as it sums it all up. As a mum, raising girls I want them to be treated fairly. I don’t want barriers that block their success and I have raised my girls to challenge in all aspects of their lives.
Let’s build a gender-balanced world
Balance is not a women’s issue, it’s a business issue. The race is on for the gender-balanced boardroom, a gender-balanced government, gender-balanced media coverage, a gender-balance of employees, more gender-balance in wealth, gender-balanced sports coverage …
Gender balance is essential for economies and communities to thrive.
As IWD highlights balance is also needed in finance. Did you know fewer women invest than men? This is probably due to women earning less in the first place but women also often find themselves with a gender pension gap. Considering statistically that women live longer than men, and have less pension this can force them into poverty. If it doesn’t cause poverty it certainly means that women need to stretch their pension further.
Online pension manager PensionBee carried out some research to find out how average pot size and pension contributions vary across the country. In their pension research they discovered that there is a gender imbalance between the genders in every single region. This gap varies from 27% to a whooping 72%. In my region, there is a 47% gender pension gap which is worrying. This has a real impact on people living in their later years. In my age group, the average woman has £26,901 compared with the male equivalent being £38,384 and that gap becomes difficult to close.
I myself have this gender pension gap but I am doing all I can now to reduce it. Like many women, mine has been created by having three maternity breaks from work. I have also worked part-time to suit our family needs and now I am working freelance and therefore I wasn’t benefitting from an occupational pension. In the same time period, my husband has worked consistently, taking promotions and pay rises as they came along. This has negatively impacted on my personal wealth. Whilst we made these decisions as a couple it does impact on my finances and it is something that I am concerned with. This is often referred to in the media and in the finance sector as the motherhood penalty. Although I am in quite a fortunate position with my husband having a good pension I am very aware that marriage has no guarantees and things change.
I used the Pension Bee pension calculator to get a forecast of my future pension, this tool is able to paint a picture of your current situation.
The Calculator Works in the following way
- Input the figure that you would like to receive annually when you retire.
- Add in some personal details including how much you already have in ypour pension pot, your age and also the age you wish to retire.
- This gives you a figure that you are likely to recieve and with this information you can decide to increase your contributions.
You can slide the toggles to adjust your contributions and see how increasing how much you pay in by just a little bit (say £50 a month) can have a big impact on your overall pot size over time. The idea is to illustrate how small changes in behaviour can make a huge difference after lots of years saving and the power of compound interest. Some people may use it and realise they can’t afford to retire when they thought they would and will have to either increase their contributions somehow or retire later. There’s a lot of power in knowing your true situation, either way.
You can find the calculator by following this link.
How You Can Protect Your Pension
- To address this gender pension gap this it is really important that we take steps to minimise the gap. As a women we should start paying into a pension as soon as we can even if we are working part time. Time and regular payments soon add up and we need to change our approach to paying in.
- When on maternity leave it is important to still save what you can in your pension pot. Maternity leave is longer than ever with many taking a year off and if you have multiple maternity leaves this can quickly create a black hole in your pension pot.
- Look at how else you can top up your pension pot. I have been fortunate enough to inherit some money and I have put this into my pension pot because I know that I will need it more in the future than I need right now!
- Many of us have easy side hustles that make extra money, consider adding this to your pension pot.
Take responsibility by searching for any gaps, did you know that you can check your NI record on the government website. This post explains why parents need to make a Child Benefit claim regardless of income.
- Since child benefit has become means tested not all woman are claiming it and this has a direct impact on pension contributions. Woman clock up state pension credits when they are caring but not working. However, if a woman doesn’t claim (because her husband earns over £50K) the mum is losing out on the future. Therefore you still should regsiter for child benefit.
Therefore Balance Better is desperately needed. We need to work towards parity and ensure women know to save and prepare themselves financially for their later years.
This is a collaborative post with PensionBee