On 21 May 1932, Amelia Earhart made history by becoming the first woman to fly solo across the Atlantic.
Her flight perfectly shows how women can achieve remarkable things when certain societal barriers are broken down.
Nearly a century later and women continue to break boundaries in countless fields. Despite this, financial gaps still remain.
From the money saved each month to long-term retirement planning, women still face disadvantages that can hinder their overall financial confidence and security.
The hopeful news is that there are ways you can overcome these barriers and strengthen your financial situation. Continue reading to discover five gender gaps, and some ways to bridge them.
1. The savings gap
For many women, regular saving remains a challenge. IFA Magazine reveals that nearly 29% of women save less than £100 each month, versus 15% of men.
This shortfall might seem somewhat modest, but over time, it could significantly affect a woman’s ability to build financial resilience or work towards her long-term goals.
There are many reasons this savings gap exists. For instance, lower earnings (which you can read more about later), career breaks, or part-time work often mean that women have less disposable income.
The above source also claims that only 17% of women are very confident in reaching their long-term goals compared to 29% of men.
However, confidence can grow with financial planning.
If you’re a woman who struggles to save, reviewing your budget or setting clear goals on a basis could help you regain control, and even small, regular contributions to a savings account or an Individual Savings Account (ISA) could help you accumulate a considerable fund over time.
2. The pay gap
Perhaps one of the most well-known gender gaps, the pay gap has been declining in recent years. Unfortunately, a disparity still exists, with the Office for National Statistics revealing that it stood at 7% in April 2024.
A main contributor to this is the “glass ceiling”, where women frequently fail to account for more than half of the top-paying positions in the country. Research on the government website found that women only occupy 43% of management roles on company boards in the UK.
While the UK does lead the world in the drive to increase the number of women on boards, the problem still unfortunately exists.
Since this is such a systemic issue, it can be especially challenging to deal with, particularly compared to some of the other gaps on this list.
Still, a financial planner could be of help if you’re a woman who is being paid less than your male counterparts. They could discuss your life goals with you and use this to build a financial plan that places your objectives first.
You might also want to take time to explore several different career development opportunities, and, above all, understand your worth and negotiate your salary as such.
3. The divorce gap
While divorce is challenging for anyone – both mentally and financially – women are more likely to experience hardship in the aftermath.
Legal & General states that 24% of women struggle financially after divorce compared to 16% of men. Moreover, 19% of women find it hard to meet the cost of essentials, versus 10% of men.
This gap often arises since women are more likely to take on caregiving responsibilities, which could reduce their earnings and pension contributions during the marriage.
Then, when the relationship ends, the financial consequences for women can be considerable, especially if assets and pensions weren’t split equally.
If you’re going through a separation, it’s vital to speak with your solicitor to explore your options.
For instance, you might be able to lodge a “pension sharing order”, stipulating that you and your partner must share your pensions equally.
Similarly, “pension offsetting” enables you and your ex-spouse to each keep your pensions by offsetting the value of the larger pension with other assets you own as a couple.
This means that if your ex-spouse’s pension is larger and the same value as a property you jointly own, you could take ownership of the property rather than sharing their pension.
Ultimately, a planner could guide you in making the most sensible decisions during this highly emotional time. They’ll even continue to support you with your finances long after the divorce, ensuring you maintain your financial wellbeing.
4. The pension gap
This aforementioned difference in retirement income is perhaps one of the most significant financial inequalities.
Research from Legal & General highlights the fact that the pension gap begins from the very outset of a woman’s career, with an initial 16% difference in contributions. By the time retirement occurs, the average size of a man’s pension pot is double that of a woman’s.
Several factors have contributed to this disparity. Indeed, career breaks for childcare, part-time roles, and the ongoing pay gap can all reduce the amount many women can afford to contribute to their retirement fund over time.
While these systemic issues are slowly shifting, there are some practical steps you can take to speed up the process.
For example, you might want to keep up pension contributions no matter what, even during periods of reduced income. Alternatively, you could ask your spouse or civil partner to continue contributing to your pension during your career break.
Read more: 3 practical steps you can take to bridge the gender pension gap
A planner could also help, allowing you to make the most of tax relief or employer matching when possible to improve your long-term financial security in retirement.
5. The financial literacy gap
The confidence to manage money often stems from sufficient education, yet many women say they didn’t receive the financial knowledge they needed growing up.
According to PA Future, 64% of women claimed to have little or no knowledge of investments compared to 43% of men. When asked about financial education in school, only 19% of adult women felt they’d been well prepared, versus 23% of men.
This lack of financial literacy can have a significant effect later on, as if you feel unsure about investing or don’t understand your options, it can be tempting to avoid the subject altogether.
However, this often means missing out on opportunities to grow your wealth, especially in the run-up to retirement.
Working with a financial planner can help you bridge this knowledge gap. A good adviser will take the time to explain your options, help you build confidence in your choices, and support you in aligning your money with your values and goals.
Over time, this could considerably boost your financial knowledge, allowing you to make informed decisions and move forward with clarity.
Get in touch
Just as Amelia Earhart broke down society’s barriers, we could help you overcome several financial gender gaps that still exist to this day.
To find out more, please contact us by email at info@investmentsense.co.uk or call 0115 933 8433.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
