In a virtual policy debate hosted by the Equity Release Council and equity release planner Key, Dr Yvonne Braun of the Association of British Insurers said: “In the advice profession men vastly outnumber women. A male-dominated profession will find it harder to attract female customers.”
David Burrowes, chair of the panel and of the Council commented: “It is vital that we explore solutions to best support women to save more in the run-up to retirement and to think proactively and holistically about all options available.”
Key’s FY 2020 data shows 26 per cent of equity release clients are single women compared to 14 per cent of single men, highlighting the importance of property wealth as a source of later life funds for single women. While the majority of its customers are married couples, it is vital that women play an equal role when discussing their retirement options and make joint decisions given their longer average life expectancies, said the Council.
Women have lower retirement savings on average, but are less likely than men to consider later life lending products as an alternative source of retirement income, at 23 per cent compared to 31 per cent.
Action must be accelerated to encourage greater gender diversity in the adviser community and help support female clients, concluded participants.
The debate follows the Pension/Property Paradox: revisiting the retirement confidence gap report by the Council and Key, which explored gender differences in retirement planning and the impact of the pandemic on financial confidence in later life. The research found nearly half of working women aged 55+ are anxious about running out of money in retirement, highlighting the need for better engagement to improve financial prospects.
“Not enough female advisers”
Will Hale, CEO of Key added: “There is a huge opportunity in this market to engage women. Our client base is diverse, so the advice provision needs to reflect that. There are not enough female advisers in the industry and we need to address these imbalances by accelerating the focus on recruiting and training more female advisers.”
Panellists highlighted key policy measures to help close the gender retirement gap in the future, including the potential to evolve auto-enrolment. Dr Yvonne Braun of the ABI added: “Three quarters of part-time workers are women, which means many are therefore locked out of auto-enrolment. Contributions for pensions should be counted from the first pound people earn.”
Auto-enrolment is a government initiative that requires all employers (even those who just have one member of staff) to automatically enrol certain staff into a pension scheme and make contributions towards it.
Panellists also emphasised the importance of creating well-paid jobs and getting women in particular back into the workforce. Rt Hon Caroline Nokes MP, said: “We need to do more to foster greater confidence for women in the workplace and in talking about money more broadly, all of which will contribute to greater levels of retirement savings in the future.”
Gender retirement gap doubles
Panellists also warned of the negative impact the pandemic has had on women when it comes to retirement. This comes as Government figures reveal the annual average pensioner income for single women has increased by just two per cent over the last five years, compared to an 11 per cent increase for single men. As a result, the gender retirement income gap has more than doubled from £1,560 a year in 2014/15 to £3,276 in 2019/20.
Will Hale, CEO of Key added: “Initiatives like auto-enrolment and addressing the gender pay gap will help in the long-term, but those approaching retirement will not reap these benefits. They need help in the immediate term to navigate their way to achieving a comfortable retirement.”
Rt Hon Caroline Nokes MP added: “Raising families is a joint enterprise and Covid has thrust many into hard fiscal choices about who should work and who should provide care for children or relatives. This shouldn’t be the case in 2021 so we need to talk more about shared savings.”
Debate panellists included:
• Rt Hon Caroline Nokes MP, chair of the Women and Equalities Select Committee
• Rt Hon Stephen Timms MP, chair of the Work and Pensions Select Committee
• Dr Yvonne Braun, director of Policy, Long Term Savings and Protection, Association of British Insurers (ABI)
• Will Hale, CEO of Key
• David Burrowes, chair of the Equity Release Council and chair of the debate