This Saturday marks International Women’s Day. Gordon Bennie, CEO of Concentric, discusses how women can bridge the wealth gap and build secure futures.
As a father to a young daughter, I find myself contemplating her future in ways I had never considered before. Like any parent, I aspire for her to enjoy a life full of choices, opportunities, and independence. However, as a financial services professional, I understand that financial security is crucial. Without it, many possibilities for her could vanish.
While I am a proud dad, I am also a strong advocate for data-driven insights. Unfortunately, the statistics reveal a daunting reality: if trends continue, my daughter — along with countless other girls — is likely to face significant financial insecurities compared to their male peers.
In the UK, by age 65, women possess 42% less wealth than men.
The figures are striking. By the age of 65, women in the UK, on average, have 42% less wealth than men, according to the Women’s Budget Group. A major factor contributing to this disparity is that the overwhelming majority of investment wealth is still held by men. Women account for only 14% of all private pension wealth in the UK, and they possess a staggering 177% less in stocks and shares than men.
This situation extends beyond the realm of income disparities, which remain significant. The issue revolves around who holds wealth and who is able to grow it.
What led us here?
The reality is not that women are unwilling to work hard or save diligently. Instead, it reflects a societal system that has not been designed to support them.
Women consistently earn less throughout their careers. The gender pay gap is still prevalent, with women in the UK earning approximately 15% less than their male counterparts, according to Pew Research. This pay disparity translates into decreased savings, smaller pension funds, and limited opportunities for investment.
Career interruptions and part-time employment further compromise financial stability. Many women take time away from full-time work to raise children or care for family members. In fact, three-quarters of part-time workers in the UK are women, which can severely impact their pension contributions and long-term earning potential.
Furthermore, women tend to outlive men but often retire in poorer financial conditions. The average British woman typically lives four years longer than a man, necessitating her savings to last longer. Tragically, many women retire in poverty.
Decades of gender norms have also reinforced the notion that financial literacy and investing are predominantly male pursuits. Studies reveal that women often lack confidence when it comes to managing investments, even if they possess the necessary knowledge, according to Brookings.
The financial services sector has yet to make adequate efforts to assist women. To be candid, much of our financial infrastructure has been designed by men, for men, and continues to be operated by men today.
The tangible repercussions of the gender wealth gap
This issue transcends mere statistics; it directly affects the lives of women lacking financial security.
Consider the woman who experiences a divorce in her 50s and discovers she has no personal pension. Or the new mother who sets aside her career for childcare, never to regain her earning potential. There’s also the retired woman who outlives her spouse and realizes too late that she lacks understanding of their financial investments. These scenarios are all too common, and I witness them regularly.
What can we do to address this?
The path ahead lies in education, access, and proactive measures.
If you have a daughter, introduce her to the concepts of finance now.
Teach her about saving, investing, and pensions. Encourage her to ask questions and, just as boys are urged to take financial risks, girls should receive the same encouragement.
If you are a woman, regardless of whether you’re married to a wealthy partner, establish your own financial plan.
Don’t rely solely on shared wealth or a partner’s pension. Understand what you own. Know where it’s invested and determine what you will need for a comfortable retirement.
If you already possess wealth, take an active role in managing it.
Research indicates that women often remain passive investors, choosing to keep their assets in cash or property instead of actively investing for long-term growth. If you’re currently hoarding cash, it’s time to make your wealth work for you.
Commitment from our company
I acknowledge that our industry must improve. At Concentric, we are dedicated to:
- Enhancing financial education for women to bridge the knowledge divide that hinders many.
- Inspiring more women to enter the wealth management field, ensuring the industry reflects the demographics it serves.
- Empowering women to gain control over their financial futures, ensuring wealth is not just preserved but effectively increased.
We also understand that actions must accompany words. Presently, our wealth consultancy team is entirely male, a reflection of the broader industry. I hesitated to write this article due to this reality, not wanting to appear insensitive. Yet, instead of avoiding the truth, we aim to recognize it and promote genuine change. This requires cultivating a more inclusive environment for women within financial services. There is a pressing need for more female advisors, improved representation in leadership roles, and better recruitment and retention strategies that make women feel valued.
Furthermore, we are committed to equipping our female clients with the knowledge and confidence to oversee and grow their wealth. This could involve investment education, financial planning, or simply fostering open discussions about money. Finally, it is imperative for all genders to challenge existing norms because the gender wealth gap is not an unavoidable fate. It is a product of structural inequality — and structural issues can be addressed, but only if we engage in dialogue about them.
The future of financial security should not hinge on outdated practices, ingrained biases, or a lack of educational access. It should be founded on knowledge, opportunity, and equality, for the sake of my daughter and every daughter.
Further reading
For those interested in delving deeper into this important topic, consider exploring the following resources:
On the Gender Wealth Gap and Financial Inequality:
On Women and Investing:
On the Structural and Psychological Barriers:
