Let’s #AccelerateAction this International Women’s Day

Women’s finances – including their pensions – are improving but more needs to be done.

A celebration of the very best of being a woman, International Women’s Day (IWD, 8 March) is a day of coming together, sharing knowledge, and at the same time recognising how far we still have to go. 

Women’s finances – including their pensions, of course – still lag men’s, so this year’s IWD theme to #AccelerateAction is especially relevant. As our latest Women and Retirement report shows, 42% of women risk facing poverty in retirement, compared to just 35% of men.*  

It’s something we covered in-depth in our brilliant mother and daughter special podcast for IWD. My colleague, MD of Scottish Widows, Jackie Leiper and her daughter Rebecca joined me to discuss ways they’d found to make talking about finances an everyday habit – and how to make things better.

Jackie and Rebecca, who recently started her first job after university, shared their experience of managing their finances and the importance of helping the next generation understand the basics of budgeting and setting good habits from the very first pay cheque. 

For Rebecca, the importance of automatic enrolment, and having open and honest conversations about money has given her the grounding to set herself up for a better financial future. She’s checking in on her pension, and how much she’s got in her pot after just a few months is enough to spur her on to save more.

Pension progress

The good news is that the gender pension gap – fuelled by women taking time out from employment to have a family and societal issues such as unequal parenting responsibilities and historically lower pay – is narrowing. 

When we look at data from our workplace pension members, the gender pension gap reduced by around 7% last year. This amounts to an average reduction of the gap between men and women’s pension pots of £1,789. 

Let’s #AccelerateAction

On the pensions front, the one, biggest, positive change for women has been automatic enrolment (AE) into workplace pensions which began 12 years ago, bringing women broadly into line with men’s participation rates.

Providers, employers, and policy makers need to keep working together to support women. 

Policy action: We attended a roundtable on women’s financial resilience at the House of Lords in February where we shared the findings from our Women and Retirement report and discussed the structural inequalities that women face in their preparation for retirement, as well as their wider financial resilience. It was a brilliant opportunity to lay bare the financial realities for a lot of women.

We regularly campaign for change and support the government’s aims for extending auto-enrolment so that younger workers are automatically enrolled from the age of 18. We want to see the lower earnings threshold abolished, too, so that pension payments start from the very first pound of earnings. 

Together, these will make an enormous difference, especially as most part-time workers are women who are often excluded from pension saving as they don’t earn enough. While these AE reforms appear to have been put on hold, we’re pushing for them to be brought in soon.

Working with employers: Targeted support during life stages when women need it the most, such as during maternity leave, part-time work, or when taking on caregiving responsibilities can make a real difference. Women need to understand the impact their work decisions could have on their later life. 

What one step can women take today?

Starting to talk about finances and getting to know their pension is the advice I’d give. Make it an everyday thing to get in the saving and budgeting habit. 

Get a pension app to find out what you’ve got for retirement savings, and what you might need – and make the most of employer contributions into workplace pensions. Your future self will most definitely thank you for it.

So, this IWD, let’s all #AccelerateAction and make the gender pension gap a thing of the past. Let’s push to make things happen faster, and make a difference.

We want better retirement outcomes for our daughters than our mothers had – and that will certainly be something worth celebrating.

Explore what actions can be taken to support women:

• Listen to our new IWD podcast, hosted by Jill Henderson, with Scottish Widows’ MD Jackie Leiper and her daughter Rebecca Leiper.
• Read our Women and Retirement report.