The government wants more self-employed people to get a pension

It’s International Women’s Day – how are women faring financially?

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As it’s International Women’s Day I decided to have a look at where women are missing out when it comes to money and where progress has been made.

Women and employment

International Women’s Day is designed to highlight and celebrate women around the world. Although women have made lots of progress in key areas over the years, we still are less likely to work full time, earn less and retire on less. The latest official figures (for 2013) show that there are fewer women than men in employment. Here are a couple of key bullet points from the government data:

  • The number of women working in the last 40 years has risen while the number of men working has fallen. In 2013, two thirds of women aged 16 to 64 were in work (it was 53% in 1971). In 2013 three quarters of men were in work, down from 92% in 1971.
  • Over 40% of women aged 16-64 work part time. This compares to just 12% of men. This obviously has a huge effect on a woman’s ability to save for retirement and it can affect her ability to progress in her career and get promoted.
  • Women are less likely to work in better paid professional jobs than men are.
  • Women with children are less likely to work, whereas men with children are more likely to work.
  • There are far fewer women than men in the top 10% of earners. The good news is that this gap is smaller for women and men under the age of 30.
  • Far more women than men work in the caring and leisure industries. These tend to be badly paid. My view is that a large part of the reason they are so badly paid is that they have traditionally been seen as ‘women’s work’.
  • Women with degrees are likely to work in slightly lower skilled jobs than men. Yet more women in the workforce have a degree – which is normally associated with higher pay. The government figures show that in 2013, 44% of women in work were graduates (either having a degree or a higher education qualification). This compares to just 38% of men. Yet men with degrees end up in higher skilled jobs.

Gender pay gap

The gender pay gap does exist, but it is getting smaller. If you’re confused about the gender pay gap, it measures the average amount that a woman and man get paid an hour. The gap is the difference between the two. The official government figures produce these average hourly earnings for full time and part-time work. And there’s quite a difference between the two.

The latest government figures for 2016 show that the gender pay gap for full time workers is 9.4%. In 1997 the figure was 17.4%. But, the overall gap (for full time and part time workers) is 18.1%. That’s down from 27.5% in 1997. As over 40% of women work part time, I think we should use the overall figure, and not the gender pay gap for full time workers, when talking about the gender pay gap.

SAVVY TIP: You can read the government’s figures on the gender pay gap on the ONS website.  You can also read my write up about The gender pay gap – what is it and what’s changing?

Women in senior roles/women on the boards

There are now more women in senior roles in companies than ever before, and more women on the board. However, some companies still have very few women on their board and quite a few don’t have any women in senior revenue generating or control roles.

When women do hold a position on the board, they are more likely than men to be in non-executive roles. And the number of women running FTSE 100 companies is still very low. In addition, there are very few women running investment funds (around seven per cent of fund managers are women).

So, what’s changing? Well, Jayne-Anne Gadhia, CEO of Virgin Money, produced a report on women in financial services, looking at the lack of women in senior and executive roles (you can read my write up of Jayne-Anne Gadhia’s report). She proposed a set of measures, including that companies should set targets for the percentage of women in senior roles and that there should be a named person accountable for that. The Treasury has since launched its Women in Finance Charter, where companies pledge to enact Jayne-Anne Gadhia’s suggestions.

The gender pension gap

Women live longer than men. That’s the good news. The bad news is that women are more likely to be in poverty than men. And as women live longer, the money we save has to last longer as well.

  • Figures from the Fawcett Society show that 52% of women over 30 earning more than £10,000 a year are saving enough for retirement compared to 60% of men. Of those who aren’t, 25% of women aren’t saving at all, compared to 15% of men (according to Scottish Widows). You can read the full Fawcett Society report on women and pensions.
  • Figures from Prudential show that women retiring in 2016 had the highest annual income on record. But, it was still £5,400 a year less than the average man. You can read more in the Prudential’s report on the gender pension gap.
  • Women used to get their state pension at 60, five years earlier than men. However, until 2010, only 45% of women got the full basic state pension, compared to over 90% of men. Apparently, the state pension age was set at 60 for women and 65 for men so that married couples could retire at the same time (there’s typically an age gap of a couple of years between husbands and wives). As you undoubtedly know, the state pension age for women is rising from 60 to 65, then the state pension age for women and men is rising from 65 to 66. It means hundreds of thousands of women have two state pension age rises at the same time. The bigger issue is that there wasn’t enough information about this so the majority of women didn’t realise how it would affect them. There’s lots of information on SavvyWoman about the work of WASPI and the other groups campaigning against the way successive governments have mis-handled the way the rises in state pension age have been introduced. You can read more about what the WASPI state pension campaign group is doing.
  • Women lose out through automatic enrolment. Automatic enrolment is the scheme whereby you’re automatically put into your employer’s pension scheme. If you don’t want to stay in it, you don’t have to. But, you’re only automatically enrolled if you earn £10,000 or more a year from each job, not in total. So, you could be a woman on a low income and you wouldn’t be put into your employer’s pension scheme, but you could also be a woman with two or more part-time jobs, earning less than £10,000 a year from each, and you still wouldn’t be automatically enrolled. You can read more about How you can join your employer’s pension scheme if you earn less than £10,000 in my article.
  • Women lose out on their state pension because many act as carers. If you’re a carer and you get Carer’s Allowance, you’ll get credits towards your state pension. But if you don’t qualify for Carer’s Allowance, you will only get them if you claim them. Currently, 95% of carers who could get these credits (mainly women in their 50s) don’t. Please do two things, firstly, sign my petition I’m calling on the government to do more so that 95% of carers don’t lose out. And you can find out How to claim state pension credits if you’re a carer in my article.

Financial power and abuse

Financial abuse is when a partner is controlling about money. It can be about money, or it can be about much bigger issues. It’s not a female only issue, but women are more likely to be the victims of financial abuse, rather than the perpetrators. That’s partly because women are still generally the lower earners in a couple (assuming not a same sex couple).

I believe that banks and financial institutions are not doing enough to help women – and men – who are being financially abused or controlled by their partners. Neither is the government. Funding is being cut and research by Women’s Aid showed that 17% of specialist women’s refuges have closed since 2010 and – until a change of policy earlier this year – two thirds of those in Engalnd and Wales were at risk of closure.

If you have a joint loan or account with your husband, wife or partner, the bank can go after either party to pay off the debt in full. Although things are improving, there are still too many cases where banks have allowed one partner to empty an account (sometimes even after the bank has been told that the relationship has broken down acrimoniously), and banks are not always helping their own customers to close accounts. You can read more about financial abuse in my article Are you affected by financial abuse?

Childcare costs and employment patterns

Not all women have children and not all women who have children take time out of the workplace to look after them. But, it’s still the case that women are more likely than men to work part time or stop work after they have children. Childcare costs affect both women and men, but the high costs of childcare are undoubtedly a barrier to some women returning to work.

On top of that, too many employers still assume that the only way to get a job done is to have someone work full time and at the place of work. This doesn’t just affect women, but it does affect more women than men – particularly those women who have children and/or those who care for elderly relatives.

Related articles:

What’s changed for women and for money over the last 90 years?

History of the state pension; 10 things you need to know about how it affects women

Video: Leading Women in Finance: Dame Stephanie Shirley

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