As a father of three daughters, I’m constantly thinking about their future and how I can prepare for it. I was dropping my youngest off at nursery and while that in itself was emotional, it also got me thinking about the life they have ahead of them and frustratingly, the financial inequality that they will experience as soon as they hit the world of work.
Recently, I read an article that said female graduates, on average, have a starting salary that is £2500 less than male graduates. That puts them at a disadvantage from the off, before you even take into account any loss of earnings should they choose to have children. Women are also more likely to take on caring responsibilities, such as taking care of family should they become ill. That’s another hit to their earning and saving power – and a five-year career break could result in a 33% reduction in their pension wealth.
Typically, women live longer than men, so they would need to save an extra 5-7% over their lifetimes to be able to draw the same pension income as men when they retire – by the time a woman reaches 65, she will have, on average, a pension worth 20% less than a man.
Sadly, the gender pension gap isn’t going anywhere fast, with experts predicting it will be another 80 years before we see it close, meaning my daughters are still going to be affected (their granddaughters might get lucky and finally see some equality by then).
So, it got me thinking, what can be done about this? While there’s nothing we can do about the pension wealth inequality, there are some things you can do to set your daughters up for the future, ranging from investing more to simply having conversations with them.
If this strikes a chord with you, your family or any of the women in your life, please get in touch and we can help you put a plan together to secure their financial future.