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Although the fight for equality has made great strides over the last century, it is a fact that women are still at a significant disadvantage to men when it comes to finances. Let’s look at some facts and stats.
It is sad but true that women have not yet reached true equality with the opposite sex when it comes to earnings. In Australia, according to the Workplace Gender Equality Agency, women are earning on average 17.1% less than men. In the US the gap is estimated at 16% and a UK goverment report puts it at 19.7%. Of course this has significant impact on many areas of a woman’s life, but filters through to retirement age when women are at a distinct disadvantage having a smaller pension pot than men which, coupled with their longer life expectancy, leaves many struggling through their retirement years.
Women are far more likely than men to give up work, either temporarily or permanently, to look after a child. Australian government statistics reveal that 18 months after the birth of a child only 54% of women had returned to work. In reality very few women return to the workforce at the same level as pre-children. Often women work part-time when they become mothers, or they struggle to return to industries where technology has quickly moved on and they are no longer up-to-speed, often changing career to less lucrative job options which fit in around parenting.
The Economist also reported earlier this year a surprising increase in the number of mothers at both ends of the wealth spectrum opting not to return to work.
The Women’s Institute for Financial Education (WIFE) estimate that on average women are out of the workforce for ten years. Whether a woman takes a break of a few months after the birth of a child or never returns to work at all, this means that they have fewer working months to contribute towards a pension.
It is a fact that women from all walks of life – single or married, working or not – fail to make personal financial planning a priority. Women often put their families and children way before themselves, and many are happy to delegate financial planning issues to a partner, which can make them vulnerable when they are left on their own through either death or divorce. The Scottish Widows Women and Pensions Report 2013 definitely backs up this point with some frightening findings:
The fact that we are at a financial disadvantage in the first place actually makes it more important for us empower ourselves financially by taking control of the monetary decisions which impact our lives so profoundly on every level. Many of us find that a frightening prospect and would rather put our heads in the sand than face up to the reality of our financial situation. If that is you, then check back tomorrow for our 8 point plan to sorting out your financial future.