While it is hard to disagree that both men and women need to be not only financially literate but supported by advisers with high-quality advice, this support may need to be tailored to take into account each gender’s challenges.
First, the ‘gender pay gap’ will impact every aspect of a woman’s life, including her later-life finances. The latest data from the Office for National Statistics suggests the pay gap among full-time employees stands at 8.9 per cent – a decline of only 0.6 percentage points since 2012 . With many men failing to save enough for retirement, if you consider their pension pots and then reduce this by 8.9 per cent, you hit the ‘gender pension gap’. That is exacerbated by the fact that not only will women pay (and receive) lower pension contributions because they earn less, but they are more likely to switch to part-time work and take career breaks.
As with men, women need to engage with an adviser as early as possible to gain the greatest long-term benefit. However, unless it is via a workplace scheme or the client is particularly wealthy, they are more likely to seriously consider their financial position in their 40s or 50s when they have had time to build up assets or, for example, are taking out a mortgage.
This is the opportunity for advisers to engage with female clients. For most IFAs, it may mean helping with the planning of an accumulation or decumulation strategy; for mortgage advisers, it is likely to involve ensuring that the mortgage process goes smoothly.
This leads on to how property fits into later-life financial planning. Given the gender pensions gap, property is arguably more important to women.
Key’s latest Market Monitor found that almost twice as many single women (26 per cent) took out equity release compared to single men (14 per cent) in the first half of 2020. These women fell roughly into two groups, the early adopters and the later-life supporters. The early adopters had either planned to use their housing wealth or, due to divorce or necessity, decided to access the value tied up in their property. The later-life supporters were older than the average customer (age 70) and, due either to being widowed or to nearing the end of their savings, were considering how their housing equity could support them.
Both need the support of financial advisers and are keen to engage with a specialist who can not only help them consider how their home could support them in later life but encourage planning for costs such as care.
Stuart Wilson is corporate marketing director at More2Life
