Why do women get such a bad deal?

Women want to save in pensions and prepare for their retirement, but they face barriers to growing their wealth.

You’re likely to have many female clients who would appreciate and benefit from a conversation about securing their financial future. If you don’t advise on pensions, it makes sense to have a referral relationship with a trusted expert who does.

Because, despite the desire to save into a pension, women are often prevented from being able to adequately do so.

Firstly, the gender pay gap means they earn less throughout their lives – the average man earns over £33,000 a year compared to the average woman on £22,800.

This means they are able to put less money into their pension and other savings even when saving a similar proportion of their income to men.

Career gaps, especially during maternity leave, can also impact overall earnings and therefore the amount women can put into their pension, reducing their overall pot.

And problems with accessing affordable childcare can leave women out of the workforce for longer than they might prefer.

Women are overrepresented in part-time working too, reducing their overall income, usually due to childcare or other caring responsibilities.

Despite having smaller pension pots, women live longer on average, which means they spend longer in retirement.

The average life expectancy of women is 82.6 years compared to 78.6 years for men, according to the Office for National Statistics.

They are more likely to be widowed, meaning they need a plan to manage their finances on their own.

What can brokers do?

By recognising this as a group that needs better support, you can begin conversations with your female clients about securing their financial future.

Consider speaking to middle-aged and older women about their pension provision and, if you are not able to offer advice, ensure they are signposted to an expert who can.

Remember it’s not just single women you need to be having these conversations with. Make time to focus on women when talking to couples about their retirement plans.

The Equity Release Council report, The Pension/Property Paradox: revisiting the retirement confidence gap, found that just 41 per cent of women are confident they will be able to afford to choose when they retire, compared with 56 per cent of men.

It also found that nearly one in four women (24 per cent) do not know where they would look if they found themselves needing extra retirement funds.

Poor pension provision is therefore something they are already concerned about but, if they have property wealth, it could provide a potential solution to their problem.

The role of equity release

Bring equity release into your conversations with your clients to discuss how property wealth can help support them in retirement – including men, women and couples.

It may or may not be suitable and, of course, there are other options, including downsizing. But it makes sense to discuss lifetime mortgages early, so they’re on their radar while they have time to make choices about growing their wealth or accessing the equity in their home.

In fact, women already make up a large proportion of equity release customers. Figures from Key’s 2022 Market Monitor show that 26 per cent are single women and 13 per cent are single men, while 60 per cent are couples.

Tailored support

Women need better support to plan their future finances and meeting their needs is not only good practice, it’s good for business too.

Property wealth is becoming a more important feature of retirement planning for all homeowners. Raising it as an option early means giving your clients all the information they need to make decisions later in life.

For the use of mortgage Intermediaries and other professionals only.

Information correct as of April 2023. The information contained in this article is the property of Lloyds Banking Group plc and may not be reused or publicised without our prior permission. The information provided is intended to be for information only and is not intended to be relied upon. If you do not have professional experience, you should not rely on the information contained in this communication. If you are a professional and you reproduce any part of the information contained in this communication, to be used with or to advise private clients, you must ensure it conforms to the Financial Conduct Authority’s advising and selling rules. Scottish Widows Bank is a trading name of Lloyds Bank plc. Registered office: 25 Gresham Street, London EC2V 7HN. Registered in England and Wales, no. 2065.Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under number 119278.