New research has found that average women in their twenties today will have £100,000 less in their pensions than their male peers upon retiring.
The report was produced by pensions firm Scottish Widows to coincide with International Women’s Day, which found that women in the first 15 years of their careers on average save about £2,200 a year, compared to £3,300 for their male counterparts.
Lower average earnings, part-time work and the need to take time out of employment to care for family all cut into savings and are setting women back by almost four decades compared to men, the firm stated. The average young woman today will need to work 37 years longer than a man to reach “retirement parity”.
The COVID-19 pandemic has further widened the gender pension gap, the firm continued. 36% of employed women under the age of 25 work in areas such as hospitality and retail, which have been among the sectors hardest hit by the health crisis, and over 49% have been furloughed.
"We know that young women have been some of the hardest hit by the short-term financial impact of the pandemic and this has only exacerbated the challenge of reaching pensions parity,” said Jackie Leiper, Scottish Widows’ managing director of pensions.
However, the firm found that if women could increase their pensions contribution by 5% from the beginning of their careers, they could almost completely close the gap by the time they retire.
[ymal]
“By taking control of their contributions and increasing them as early as possible, young women stand a fighting chance of improving their long-term savings outlook,” Leiper said.
A spokesperson for the Department for Work and Pensions drew attention to the government’s pension reforms and increased pension participation among women in the private sector, which rose from 40% in 2012 to 86% in 2019.
This issue has been picked up by many campaigners who are pushing to eradicate the financial barriers between girls and menstruation. So, let’s talk about exactly why young girls need to be growing up in a world free of period poverty.
What Exactly is Period Poverty?
Tampon tax refers to the profits from the VAT charge of 5% applied to sanitary products and while this might be significantly less than the standard 20% VAT which applies to a whole host of other products, there is still dispute over whether we should be paying tax duties on these products at all.
A couple of retailers have swallowed the tax and a Tampon Tax Fund has been set up to support certain women's charities, but that hasn’t changed the fact that many girls are growing up in a climate where they can’t afford these essential items.
This ties in with period poverty and the inability to afford sanitary products such as tampons, but it can also relate to a lack of understanding of menstruation. Governments have come under fire for matters such as the tampon tax, which is thought to contribute to period poverty.
What Effect Does Period Poverty Have on Young Women?
On average, girls get the signs of their first period at around twelve years old, but periods can start for girls as young as eight. Not all young girls are fortunate enough to be able to add sanitary products onto their parents’ weekly shop and this has left many without access to sanitary items. Experiencing symptoms and having no access to period products means that many girls could be going through period poverty during the peak years of their education and development.
The average schoolgirl is found to take three days off each term due to period related issues and 1,000 girls said that period poverty affected their academic performance. There needs to be a solution to remedy this, allowing girls to focus on their education.
How Are Authorities Addressing Period Poverty?
In April 2019, the UK Government’s Department for Education announced its commitment to providing free sanitary products across England’s primary schools by early 2020. The Children and Families Minister Zadhim Zahawi covered some of the key concerns for period poverty campaigners, outlining the move as a step towards enabling girls to meet their full potential, while also leading happy, healthy lives. The classroom is one of the key places to tackle period poverty and in February the UK government announced that it intends to implement classes on menstrual health by 2020, which is certainly a step in the right direction when it comes to educating young girls about their periods.
Period Poverty in the Classroom
There’s often a lot of pressure placed on parents to teach their daughters about periods but if they don’t know, they can’t share so we should be more proactive in talking about menstruation in the classroom. As we’ve already mentioned, the government is taking the right steps towards bringing periods into the classroom and by educating girls at a young age, the school system can help to tackle period poverty at its very origin. There’s certainly a stigma around menstruation and by leveling the playing field early on, we can inform young girls about what to expect and that it is totally natural. Plan International UK found that some of the most reoccurring reasons cited by girls missing school lessons, due to period related issues, were embarrassment and anxiety about the situation. This demonstrates the need for period education and schools should be striving to tackle this and make classrooms a safe space for all youngsters.
As women, we have a duty to share and support each other through an experience that we all have in common, so let’s tackle period poverty and raise a generation of girls who have ready access to essential sanitary products and are empowered by their bodies, not held back by them.
Thanks to various widespread social media movements, there is already a growing understanding of period poverty amongst teenagers and young girls. PHS Group carried out a survey in which a third of participants said that either they or someone they knew had been affected by period poverty. Teen activist Amika George began the #FreePeriods movement, and the nineteen-year-old is amplifying the message that no young girl should have to miss out on learning because they can’t afford sanitary products. She has joined forces with various other campaigns such as the Pink Protest and the Red Box Project to reiterate the importance of achieving period equality for all girls.
Sources:
https://www.globalcitizen.org/en/content/period-poverty-everything-you-need-to-know/
https://www.nhs.uk/conditions/periods/starting-periods/
https://schoolsweek.co.uk/dont-hide-periods-in-schools-urges-charity-at-head-of-government-taskforce/
https://www.globalcitizen.org/en/content/amika-george-period-poverty-uk/
https://www.theguardian.com/commentisfree/2019/jan/08/girls-school-period-poverty-scotland-free-menstrual-products-england-campaign
https://www.independent.co.uk/news/uk/home-news/period-poverty-girls-school-absent-phs-group-menstrual-a8922246.html
https://plan-uk.org/media-centre/plan-international-uks-research-on-period-poverty-and-stigma
https://www.gov.uk/government/news/free-sanitary-products-in-all-primary-schools
http://redboxproject.org/
https://www.bbc.co.uk/news/newsbeat-47350835
Approximately 82% of Americans supported paid maternity leave for mothers after a birth or adoption, according to a recent Pew research. Yet only 17% of working Americans are able to access paid parental leave today. While there has been some progress in promoting a balance between work and family life for female employees, there remains a lot to be done to support mothers to be in the workplace, particularly women in finance.
Your Earning Potential is Lower Both During Pregnancy and After Returning
Women in the American workforce are more educated than ever but continue to be underrepresented in the finance industry. Although the percentage of women in the financial industries is around 54.5%, there remains a significant gender gap which plays a large part in the decision of women working in finance on whether to take maternity leave. In fact, the motherhood penalty costs women around $16,000 in lost wages annually and 25% of women have to go back to work two weeks after giving birth to keep afloat financially.
Aside from taking maternity leave to prepare for the new arrival, some women leave earlier due to medical complications such as gestational diabetes and find themselves further financially vulnerable. The impact is felt not only medically but also financially due to time off being unpaid or paid at a significantly reduced rate. Considering almost 10% of pregnancies are diagnosed with gestational diabetes annually, the chances of women in finance having to deal with this are quite possible. Therefore, not only do women earn less while taking maternity leave but they are almost guaranteed to earn less than before pregnancy, and their male counterparts, meaning their family’s financial stability can be threatened.
Your Career Progression Trajectory Changes or Slows
For women looking to progress in finance, the 70-hour work weeks and full diaries can act as a deterrent against being selected for an executive-level job. In fact, the ‘Gender Diversity in the Financial Services Industry’ report by Mercer showed a significant decline in female representation as career levels rises in finance. Only 15% of women were represented at the executive level in finance, while only 26% of senior managers were female.
Thanks to factors such as the finance industry’s slow response to flexible working, women’s chances to achieve a better work-life balance are reduced and they tend to face an increased likelihood to be passed over for job promotions. Women with children also take longer to climb the ladder in the finance workplace as they juggle childcare hours and a demanding industry which means their earning brackets can remain unmoved for a longer time. Early starts and late nights required of many full-time jobs on Wall Street often means women in finance either have to rely on round the clock childcare or make the choice to go part-time.
Increased Pressure and Diminished Chances for Management Opportunities
Although 84% of employed Americans believe that having working mothers in leadership roles will boost the success rate of businesses, only a small% of women who have taken maternity leave will get the chance. Because of the negative association between women taking maternity leave and their commitment to the job, employers are more inclined to place these women in management positions within their company.
Published experiences by women working on Wall Street have shown that women tend to face increased pressure in trying to conceal their pregnancies for as long as possible, along with the constant pressure of when they plan to return (or whether they do plan to at all). For many firms on Wall Street, women are often offered six weeks of disability leave and end up losing not just pay equity but ground on progressing into the management realm.
Despite the well-publicized benefits of maternity leave including lower infant mortality rates and lower postnatal depression rates, support for women taking maternity leave in the finance industry continues to be woefully lacking. The choice to take time off to raise one’s child is repeatedly shown to have a higher cost for women, starting from the initial leave allowance rates and possibly defining the future of their careers. However, it is also important to recognize the progress made by financial firms like Deloitte, KPMG, and Bank of America. The support shown by these companies for mothers in finance can be a great starting point for the revolutionary change needed in the finance industry.
According to Lucy Franklin, Managing Director of Accordance VAT, this is disappointing, and has prompted responses ranging from outrage about the results to despair about the process, with a healthy dose of weak excuses thrown in for good measure.
In the criticisms and reporting, we run the risk of getting mired in the process, not the impact. Gender Pay Gap reporting represents an immense opportunity to identify if and where there are issues within a business. Visibility is the first step towards progress – and the gender pay gap is an issue we need progress on.
That said, I know that adopting new reporting obligations can be onerous – finance is full of filing and submissions, and Accordance is no stranger to mandatory deadlines. But in this instance, the benefits outweigh the administrative burden. Gender pay gap reporting offers the potential to identify, at every level of a business, where inequalities lie. Whilst this may appear a redundant statement, the lack of progress in gender equality in the workplace over recent decades can attest to the necessity of an issue being recognised, being visible, and being acted on.
This is why Accordance has made the decision to publish our gender pay gap statistics, despite being well beneath the legal threshold for reporting. I want Accordance VAT to play a role in changing a historically male dominated sector. Finance and professional services companies boast a huge number of talented, bright, determined women. Many of these women have great careers in support functions, but those shouldn’t be the only avenues open to them. Financial and professional services organisations are unfortunately disproportionately dominated by men in the more senior positions, and this needs to change. Reporting on our Gender Pay Gap may not affect the systemic issues, but it is a step towards addressing inequality more widely as well as setting the bar for other businesses. We want to lead the way in our sector, and that means voluntarily putting ourselves forward, celebrating our successes where we find them but being the first to highlight where progress is needed.
Publishing our results is just the first step. Having identified that our mean pay gap sits at 12.8% and our median pay gap at -3.5%, we know that we’re doing better than some of our larger competitors in the sector, but we can do more. Publishing our figures shows our commitment to tackling this gap, as do the range of measures we have put in place around recruitment, training, job shadowing, and progression policies. These policies don’t just relate to gender diversity, but also diversity in terms of ethnicity, culture, physical ability, health and mental health.
Fundamentally, greater equality in our sector is about much more than just an improvement in statistics. Finance drives the world – and thus has a significant impact on how lives are led. We need to attract the best and the brightest minds shaping this future – and we need people from different walks of life with a seat at the table. Women need to be as key as men in determining the shape and course of finance, and how it affects economies and shared futures. Again, publishing our statistics cannot affect global trends and practices, but it does demonstrate our commitment to equality, and our determination to reshape the sector we work in.
I urge other businesses below the threshold to join us – to publish statistics for staff and for the wider world, and to identify where progress needs to be made. Reporting and publishing on the picture of an organisation offers an immense opportunity to recognise where problems are, and in doing so shape and improve them for the benefit of everyone. Equality requires commitment and a will to change, but the benefits of a more diverse workforce will be felt both in and outside of the financial and professional services sector.
The analysis also found that, out of the 10 most common names on the executive boards, the first female name, Sarah, only comes in 10th and none of the boards have more women than men.
An online employee referral recruitment platform has analysed data from the top 25 accountancy firms in the UK and discovered that women make up just a quarter of the executive boards, however statistics show that women made up 44% of full-time accountants in the UK in 2014.
The research was conducted by Real Links, a platform that allows UK business owners and HR teams to access a potential talent pool of hundreds of thousands of employee referral candidates and creates anonymised profiles, ensuring there’s no unconscious bias when choosing candidates.
Real Links also discovered that only two of the top 25 firms boards are nearly equal in the gender split and a further six boards were only one third women. Four executive boards had no women on them at all.
When studying the data further, Real Links found that, out of the 10 most common names on the executive boards, Mark, David and Andrew are the three most common and the first female name, Sarah, only comes in at the 10th spot. Furthermore, out of the top 20 most common names, only two female names appeared.
Sam Davies, CEO and Co-Founder of Real Links, said: “While statistics show that the accounting industry has a relatively even split between men and women, it seems women are still struggling to climb to the top of their firms.
“The statistics we discovered were shocking and show that inequality is still prevalent in the industry. Despite targets and policies designed to encourage more women into senior roles, progress has been slow. The recent gender gap reporting has shown that parity is still a long way off, so at Real Links, we think that employers need to consider anonymising recruitment to ensure candidates are chosen on experience rather than being subject to any unconscious bias.
“The top 25 accountancy firms need to ensure they’re leading by example to try and close the gender split at the most senior levels in their industry.”
(Source: Real Links)
A lack of access to finance is one of the major barriers facing women entrepreneurs in low-income communities. 80% of women owned businesses with credit needs are either unserved or underserved – a $1.7 trillion financing gap. By working with women on how to collectively save money, develop their business skills and facilitating access to affordable loans, CARE has seen an astounding uplift in success rates.
In Ethiopia, CARE has recently supported 5,000 women entrepreneurs in this way, resulting in an increase in their income of 500%. The programme supported women entrepreneurs from the slums of Addis Ababa to set up or expand their own businesses. Approximately 70% did not have any savings in the beginning of the project - this number was reduced to 3.6% when the project concluded three years later.
All data points in the same direction: investing in women’s economic empowerment is critical to unlock their economic and social potential. Women are shown to be stronger savers, more prudent borrowers and calculated risk-takers. Giving women better access to financial products and services could unlock $330 billion in annual global revenue.
CARE is therefore calling on the global financial sector to improve products and services for women. This will not only have a positive impact on individual women, but also their communities and, ultimately, national economies.
Through CARE’s ‘Access Approved’ campaign, women from Sri Lanka, Ivory Coast, Jordan and Peru share their stories on film for the first time, telling the banks what they think is needed to open up access to finance for women. These new films aim to bring the real issues to the fore, providing clear and personal recommendations to the financial sector including:
- Develop products and services that are specific to women’s needs (Martha from Peru)
- Offer alternative solutions to collateral requirements, such as loans based on savings group activities, and introduce loans with more flexible repayment terms (Jeanne from Ivory Coast)
- Train and employ more women within the financial industry (Sarojini from Sri Lanka and Bara’a from Jordan)
Women face all kinds of hidden barriers to accessing finance - just because they are women. Take Yeo Nakoni, a female vegetable farmer from the Ivory Coast: “I’ve worked this land now for 35 years, but the land doesn’t belong to me. In our community women don’t own land, it belongs to men.” This systemic inequality is then compounded when women try to access finances to grow their businesses: “When we go to the bank to ask for a loan, we’re denied because we have no collateral.”
Yeo is part of CARE’s Women in Enterprise Programme, supported by H&M Foundation, which has reached 133,000 women entrepreneurs globally since 2014. Yeo is a member of a savings group, based on CARE’s flagship Village Savings and Loans Association model. In her words: “This approach allowed us to strengthen our group spirit, savings and especially the repayment of loans taken out from the group. Every Sunday we each put in 500 francs (0.86 USD) and from that we are able to give each other loans. We repay our loans with interest, so our fund can grow. Within the group we can help each other. What we can do as a group, you can’t do by yourself.”
However, sometimes group members require larger loans and other financial products to meet their business needs. This is why CARE also supports savings groups to link safely to formal financial service providers. Thanks to CARE’s partnership with a local microfinance provider, Yeo was able to take out a low-interest loan of around 2,500 USD to expand her enterprise. She is now confidently repaying her loan and she is extremely proud of what she has achieved.
Laurie Lee, Chief Executive, CARE International UK comments: “Investing in women entrepreneurs is not just the right thing to do. It’s the smart thing to do. Women represent an enormous untapped market for financial institutions and we want to work with them to open up new opportunities. This makes business sense for both financial institutions and the women we support.”
Women in banking face a ‘double glass ceiling’; one when being promoted to management and another when being promoted to executive roles, according to new research from the SKEMA Business School Observatory on the Feminisation of Companies.
Although women make up 52% of banking sector employees globally, they average only 38% of middle managers and 16% of executive committees.
These are the findings of Professor Michel Ferrary’s ‘Gender Diversity in the Banking Industry’ report, which examined the female representation of 71 banks in 20 countries.
He said: “Women have long faced discrimination at work, yet what we are witnessing in the global banking sector is a ‘double glass ceiling’ effect, where of the 38% of women reaching middle management, far fewer are able to ascend again to executive roles.
“There are a number of possible reasons for this trend. Firstly, unconscious bias can be at work when men choose not to promote women. However, this seems like a lazy generalisation. One other industry theory that is arising is that women are more reluctant to put themselves up for executive positions, and so are losing out. Whichever is true, it is clear that women face discrimination throughout the entirety of their careers in banking.”
Boards of directors are more feminised than executive committees globally, usually due to government-imposed diversity quotas.
Ferrary said: “Scholars know that employing women on boards is beneficial to banks as it helps to mitigate risk. Studies unanimously show that women are less likely to gamble with assets and were noticeably absent from the worst offending firms during the 2008 financial crash. This is one of the reasons why many countries impose gender quotas on the boards of their prominent banks.
“Yet there are cultural disparities at a global level. For example, although banks in countries like Canada, France and Sweden, where the level of women on boards is 45%, score highly in this category, it is worth noting that Japan only boasts 12% of women on its boards of directors. This can often be explained by the cultural expectations of women and their distribution in the country’s workforce as a whole.”
(Source: Bluesky PR)
Iwoca has found that female applicants are 18% more likely to repay small business loans on time than their male counterparts. Women-led small businesses make up an estimated 20% of iwoca’s customers and it has supported an estimated 2,400 women business owners in the UK with almost £50 million in lending since its launch in 2012.
iwoca uncovered the data in response to a study by the Federation of Small Businesses (FSB), which found that a quarter of female small business owners cite the ability to access traditional funding channels as a key challenge, with many relying on alternative sources, such as crowdfunding, personal cash and credit, for growth.
While this technology-driven risk platform draws on thousands of data points to make credit decisions, gender is not included. iwoca’s data scientists were able to calculate gender-based statistics on loan repayment rates by checking customer application forms for self-identified female titles and then comparing the approximate default rates for both cohorts.
Christoph Rieche, Co-founder and CEO of iwoca, said: “More can be done to narrow the entrepreneurial gender gap in the UK. Making it easier for women to access business funding would go a long way to achieving that. Sadly, the reality is that banks are withdrawing critical finance from across the entire small business sector and unless the Government takes action to encourage greater competition that will allow alternative providers to fill the hole, women will continue to be at a greater disadvantage from an unfair system, regardless of their higher propensity to repay on time.”
(Source: iwoca)
Sopra Banking Software uncover why it is that men still dominate senior positions in Tech and why men are out-earning women, even in equal positions.
The UK gender pay gap won’t close until 2069 unless measures are taken to combat it now. That’s another 53 years that women will continue to pay a higher price for being female.
A study by McKinsey Global Institute found that in an ideal scenario, where female roles are identical to those of men, “as much as $28 trillion, or 26%, could be added to the global annual GDP by 2025.”
Gender Disparity in the Workplace
Laura Parsons, Senior Manager at Deloitte, shares these findings: Last year, girls outperformed boys in every science, technology, engineering and mathematics subject, and even though innumerable top-paid jobs demand capabilities in STEM subjects - 70% of women in the UK with a STEM qualification aren’t working in compatible fields.
What is it that pushes women out of these industries, and how do we secure them from entry level to senior positions, and offer support in pursuit of entrepreneurial ventures?
Unsurprisingly, McKinsey Global Institute found that 38% of women in the technology field feel that gender discrimination staggers growth and chances for progressing their career in the future. 60% of these women attribute not wanting to be a top executive to excessive stress and pressure. Of all the fields researched, these figures were among the highest.
Melissa North, head of human resources at Sopra Banking, shares: “Businesses are not taking adequate measures to ensure women feel they have the reassurance to pursue a work-life balance, including starting a family - and therefore women don’t succeed long term. Feeling like they must compromise having a family to have a career is one of the leading reasons women don’t stick around to get moved into leadership roles.”
Pip Wilson, entrepreneur, investor, and co-founder of amicableapps, adds: “Ultimately, the thing that will completely level the playing field is an even split between men and women in childcare.”
As a parent, Pip Wilson shared the domestic workload with her husband to be able to focus on the success of her business ventures. This often meant her husband would stay home while she worked, and vice versa.
Something as simple as employers providing or supporting childcare initiatives for employees could prove to be one of the most important incentives for females in the workplace.
Tech: A Growing Sector for Women
Entrepreneurs and business women, such as Melinda Gates, wife of businessman and philanthropist Bill, see the value of using tech to their advantage: “To me, the tech industry is one of the best places to work right now. If I was working again, I would work in biological science or tech or a combination of both. Every company needs technology, and yet we’re graduating fewer women technologists. That is not good for society. We have to change it”.
Women should view this as the best time to enter the tech market: more people are graduating from tertiary levels than ever before, and women are outperforming men in STEM subjects.
As businesses become aware of what this lack of gender representation means for their overall success, the more women will become empowered to hold positions they didn’t before.
It’s tough to identify whether the gender bias is due to subconscious views during the recruitment process, or from the ongoing cycle that sees women receiving lower pay and fewer promotions, thus resulting in women keeping themselves placed below men through these continuous actions. The social constructs for gender roles will take time to be broken down.
There is good news for women, however. Studies show that those who ask for the same salary as men, in the same role, tend to get offers in line with what they are asking.
What Should the Workplace Look Like?
Take gaming for example: Women make up only 22% of game developers, yet represent 50% of the people who play video games.
As a business woman and consumer, Pip Wilson believes that people inside your company need to reflect the people you’re trying to serve.
Businesses need to recognise the responsibility they have to women and gender equality in the workplace, but also the possible benefits that come with hiring from a larger pool of talent, that includes women:
- Increased labour supply
- Higher incomes
- Productivity gains
- Reduced poverty in developing countries
- A unique angle and approach to problems, due to a different atmosphere cultivated by women
Once a culture of diversity has been adopted and is naturally functioning, there will be a good discrimination in place – one that filters and keeps only the best for the job, regardless of gender.
How Companies Can Address the Gender Disparity:
- Provide practical career insights to educators and policymakers
- Create more support for women returning to work
- Share detailed information on the gender pay gap with employees and the public
Melissa North, Head of HR at Sopra Banking Software adds that networking is important, “Having a belief and not doubting yourself is important as a woman climbing the business ladder as well as making yourself visible to other women in the industry and talking about your struggles. Not chasing your dreams of going into a new field because of commitments attached to gender shouldn’t hold you back.”
Tips for Women in Tech:
Talk to others: Fight the temptation to ‘do it yourself’, and get help and advice from wherever you can
Find mentors and those who have been in your shoes before: male or female
Use tech to your advantage: A study done by Accenture details how mobile tech has made it easier than ever to balance work and home life. Exploit the connectedness, making use of mobile apps and cloud services. A successful business no longer requires a 9-to-5 in an office
Have confidence and trusting your abilities: Many women tend to believe they fall short in the skills needed to thrive in business. A lack of confidence means avoiding intimidating tasks or new disciplines, more so than some men, who are more likely to try
At a time when the tech industry and business overall is dominated by males, women should take this opportunity to get a head start in whatever they want to achieve, using the various tools available in a changing world. Businesses should recognise this as an opportunity to empower women, and to attract the best new talent, regardless of gender – as it’s crucial to growth.
(Source: Sopra Banking)
Sharing thoughts, ideas and opinions on how the Financial Sevices Sector can get bet better gender diversity.
