When it comes to financial equality, while much has been done to narrow the gap between men and women, imbalances remain.
You’ve previously read about the gender pensions gap and ways in which women can boost their retirement savings, and how we’re striving to build a secure financial future for all.
In the last two years, the Insuring Women’s Futures initiative, introduced by the Chartered Insurance Institute (CII), has seen the insurance and personal finance professions work together to improve women’s lifelong financial resilience.
A key focus of the initiative is to focus on six “moments that matter” – the life events when engaging with your personal finances and with a financial planner can add real value. These moments can be especially important for women.
Read on to find out more about these “moments that matter”, and for three steps you can take to achieve more financial equality.
The 6 “moments that matter” where engagement and advice are critical
Whilst these are moments when we should all assess our financial situation, these are identified milestones where women should take an active interest in their finances and, potentially, also chat to a financial planner.
- Growing up, studying, and requalifying
- Entering and re-entering the workplace
- Relationships: making and breaking up
- Parenthood and becoming a carer
- Later life, planning and entering retirement
- Ill-health, infirmity and dying
All the moments above have an impact on our financial life and, significantly, on a woman’s life. Each key moment is a point where financial education and a chat with an HFMC planner may be useful. For women, professional guidance in these times could help them balance the scales against their male peers and feel more empowered to make important financial decisions in the future.
The impact of inequality isn’t felt just by women, but society as a whole, so it’s important for everyone to be involved.
It’s also important to remember that it’s not just about this generation. Becoming more engaged with finance affects our children, grandchildren, and great-grandchildren.
Despite the importance of engaging in these “moments that matter”, too few women are seeking the education and advice needed to make positive decisions.
Indeed, Unbiased report that only 36% of women in the UK have sought help from a financial planner, compared to 46% of men. The same report states that three-quarters (75%) of women don’t know how much they need to save for a comfortable retirement, compared with only half (52%) of men.
So, what can you do to close the financial equality gap?
3 important steps you can take to improve gender financial equality
1. Educate yourself and others
The more you know about personal finance, the better you can make informed decisions about your money. So, start by reading the financial press and engaging with issues such as savings, pensions, and tax.
Passing on your own financial knowledge is also critical – and don’t be afraid to start early! Our guide to seven strategies for teaching children about money will be useful here, from helping them to understand the difference between saving and spending, to “earning” their money through household chores.
With my children who are aged four and six, we don’t discuss the intricacies of a pension, but we do talk about saving some of the “tooth fairy” money for something special. Early education can be so powerful.
Working with a financial planner can also help. Research by insurer Royal London has found that people who take financial advice feel they have a significantly better grasp of products and financial matters than people who don’t.
For example, non-advised customers are three times more likely to say they “wouldn’t know where to start” with taking out life insurance or saving for retirement.
Increased knowledge makes you more confident about your finances and you’ll feel more in control. This can lead to better decisions and better outcomes for you and those around you.
Empowering your female relatives – daughters and granddaughters – with financial knowledge can be particularly beneficial when they go out into the world of work or enter a long-term relationship.
2. Engage with the issues
Another key step to ensuring more financial equality is to engage. Getting to grips with your finances now will ensure you’re better prepared at one of the “moments that matter”.
Knowledge is power, so let’s educate one another. It can start small but making sure you’re included in your partner or spouse’s annual review meeting is a great way to begin. Additionally, read the investment bulletins that we send, so that the language becomes familiar and not as scary as you think.
We’re increasingly holding meetings with spouses and partners as we believe this leads to far better outcomes. Not only do you feel more engaged and part of the process, but you can discuss and work towards your goals together.
Don’t assume that your spouse or partner has covered what’s important to you. You’d be surprised how some relationships can have different views on investment, objectives, and timelines. Be involved and contribute to the discussion.
3. Act now, not later
Start early. Engage now, not in two years’ time when something happens, or when death or illness strike and you are forced to educate yourself at a time when emotions are high, and your time needs to be spent on a loved one.
Research by the Financial Conduct Authority has found that a higher proportion of women say they have low confidence in managing money or knowledge of financial matters.
So, begin taking a keen interest in your finances now, as you won’t want to start reading up on insurance or pensions at a challenging time when there are important issues going on in your personal life.
It isn’t a nice thing to consider, but if your spouse or partner were to pass away, would you know how to take over your combined finances by yourself? If not, it may be beneficial to get up to speed, and to remain a part of the financial conversation in your household.
Especially if you are a woman, starting to engage with your finances could help you to feel more confident when it comes to making financial decisions. When it comes to risk-taking, for example, Unbiased report that only 1 in 10 women have a Stocks and Shares ISA, compared with 1 in 6 men.
What this means is that women, overall, are capitalising less frequently on the opportunities available to them, impeding their ability to build wealth or save for the future.
By educating yourself and engaging with a financial planner now, you could better understand your approach to risk, giving your money vital additional years to grow. This could be the difference between having enough money to retire on your terms and having to work for longer.
Get in touch
At HFMC we believe everyone, regardless of gender, should have a robust financial strategy that helps to provide security and peace of mind.
If you would like to discuss any of the above issues, or how you could better plan your financial future, please email or contact us on 020 7400 4700.