New research shows the average salary gap between men and women is £12,752 by the age of 25 and £26,065 by retirement age. This inequality not only means one in two women lose sleep because of financial worries, but a female graduate who decides to work part time for just 3.7 years in her 30s will be earning 7.7 per cent less in her 50s than if she had remained full time. This will eventually cost her £201,396 overall.
Most women are unaware of the long-term financial impact of short-term childcare decisions made after starting a family. Research shows that women have historically lacked the confidence needed to negotiate a pay rise or proactively invest their money, in comparison to their male colleagues. So here are three things you can do to help reduce financial inequality across your organisation:
Despite initiatives such as shared parental leave, which just 2 per cent of couples are utilising, according to the latest HMRC data, far too many women assume it’s their responsibility to become the primary carer for their children and work part time, or do all the school runs, when this isn’t necessarily the case.
More than half of all men believe childcare should be shared equally and want to become more involved parents but are themselves at risk of slipping into gendered stereotypes. Research shows that ‘hands-on dads’ are not only happier and healthier, but also 40 per cent less likely to break up with their partner.
Instead of just providing coaching to women, offer it to both men and women. The objective being to ensure both genders are given the opportunity to reflect on how they can create a sustainable work-family balance and share parental duties, so that no-one unnecessarily compromises their future career or income.
Break the taboo
As well as impacting on the division of childcare, gendered stereotypes mean that men are also more likely to be responsible for managing the family finances and making investment and saving decisions than women.
The result is that many women haven’t had enough experience in financial management, hence can lack confidence when it comes to making decisions about money and their finances. To break down this barrier, consider bringing women together in small groups to discuss their finances and share tips with each other. This could take the form of a webinar, facilitated by a professional such as a financial advisor, who can answer any questions and give people the confidence to take more ownership of this important part of their lives.
You could also create a hub of financial wellbeing information, featuring articles, advice, guides, financial tools and calculators, for employees to explore and increase their understanding of what they could be doing to support themselves in this area.
Overall, women experience greater financial anxiety than men (51 per cent compared to 41 per cent). Drivers of this could include the fear that they’re not doing the right things with their money or that they won’t have enough to retire on. So, another way to encourage employees to address these worries is to make financial wellbeing part of your overall wellbeing strategy, with education specifically aimed at helping women to understand how financial anxiety can undermine their health overall.
Provide access to resources, such as information, articles and case studies on everything from protecting yourself and your family to saving and investing to make your money work harder for you. Build analytics into the system, so you can monitor which articles are proving most popular to inform further initiatives. Be sure to include a mix of digital and face-to-face events to appeal to different learning styles.
The overall aim should be to create a culture where both men and women are just as likely to be asking each other if they know of any good funds to invest in, and which pension funds are performing well. With resources and tools in place so everyone knows how to go about accessing the expert advice they need to make decisions based on their unique circumstances.
Helen Letchfield is co-founder of Parent & Professional