"There is a huge opportunity in this market to engage women. Our client base is diverse, so the advice provision needs to reflect that."
Speaking at a virtual policy debate hosted by the Equity Release Council and Key, attendees discussed a range of factors impacting the gender gap in retirement savings.
The debate follows a recent report by the Council and Key, which explored gender differences in retirement planning and the impact of the pandemic on financial confidence in later life. The research found nearly half of working women aged 55+ are anxious about running out of money in retirement, highlighting the need for better engagement to improve financial prospects.
Panellists during the session included Caroline Nokes MP, chair of the Women and Equalities Select Committee, Stephen Timms MP, chair of the Work & Pensions Select Committee, and Dr Yvonne Braun, director of policy at the Association of British Insurers (ABI).
Key’s FY 2020 data shows 26% of equity release clients are single women compared to 14% of single men, highlighting the importance of property wealth as a source of later life funds for single women. While the majority of its customers are married couples, it is vital that women play an equal role when discussing their retirement options and make joint decisions given their longer average life expectancies.
Despite women having lower retirement savings on average, they are also less likely than men to consider later life lending products as an alternative source of retirement income (23% vs 31%).
In an important step towards encouraging a more holistic approach to retirement planning, Stephen Timms MP confirmed the Work and Pensions Select Committee inquiry into pension freedoms would look at advice and guidance to ensure all assets are considered, including property wealth.
Panellists also warned of the negative impact the pandemic has had on women when it comes to retirement. This comes as Government figures reveal the annual average pensioner income for single women has increased by just 2% over the last five years, compared to an 11% increase for single men. As a result, the gender retirement income gap has more than doubled from £1,560 a year in 2014/15 to £3,276 in 2019/20.
Additionally, panellists emphasised the importance of creating well-paid jobs and getting women in particular back into the workforce. Caroline Nokes MP, commented: “We need to do more to foster greater confidence for women in the workplace and in talking about money more broadly, all of which will contribute to greater levels of retirement savings in the future.”
Yvonne Braun commented: “In the advice profession men vastly outnumber women. A male-dominated profession will find it harder to attract female customers.
“Three quarters of part-time workers are women, which means many are therefore locked out of auto-enrolment. Contributions for pensions should be counted from the first pound people earn.”
David Burrowes, chair of the panel and of the Equity Release Council, said: “It is vital that we explore solutions to best support women to save more in the run-up to retirement and to think proactively and holistically about all options available.”
Will Hale, CEO of Key, added: “There is a huge opportunity in this market to engage women. Our client base is diverse, so the advice provision needs to reflect that. There are not enough female advisers in the industry and we need to address these imbalances by accelerating the focus on recruiting and training more female advisers.”
“Initiatives like auto-enrolment and addressing the gender pay gap will help in the long-term, but those approaching retirement will not reap these benefits. They need help in the immediate term to navigate their way to achieving a comfortable retirement.”
Caroline Nokes MP concluded: “Raising families is a joint enterprise and Covid has thrusted many into hard fiscal choices about who should work and who should provide care for children or relatives. This shouldn’t be the case in 2021 so we need to talk more about shared savings.”
