Better education about pensions and finances, improved support for carers, childcare support and combined employer/government pension top-ups for those taking parental and carer leave can help address the critical issues behind the lifetime income gap between men and women, according to a new report.
The report, Securing the financial future of the next generation, by the Chartered Insurance Institute addresses the financial risks faced by women over their lifetimes and suggests how the insurance industry, employers and policymakers can address these.
It identifies six “Moments that Matter” in women’s lives where effective change can be made. The moments “relate to pivotal times in women’s circumstances” when they are most exposed to 12 perils and pitfalls that the report also spells out.
The six moments are: growing up, studying and requalifying; entering and re-entering the workplace; relationships: making up and breaking up; motherhood and becoming a carer; later life, planning and entering retirement; ill-health, infirmity and dying.
The 12 perils and pitfalls include the gender pay gap for those re-entering the workplace. For motherhood and becoming a carer, they include “a continuing motherhood and caring penalty” and “the flexible working sacrifice” and the long-term impact on earnings and savings and pensions provision. Suggested interventions are support for mothers at work, ensuring awareness of the potential long-term consequences of work choices and financial management decisions at home so women can make informed decisions that impact their short and long term financial independence and resilience.
The report calls for broad workplace financial education programmes on pensions and savings timed with maternity/paternity leave. It says employers should seek to improve their part-time and flexible work policies and career progression opportunities and develop shared parental leave and working family strategies. It also calls for flexible leave options for parents of sick children.
For older women it calls for more support for working carers, including elderly care leave solutions and for combined employer/government pension top-ups for those taking parental and carer leave, with tax incentives for employers.
In terms of policy, the report recommends a review of taxation systems to balance (child) care cost and financial provision for later life such as childcare tax pension credits, again with employer incentives, a statutory care pay or provision, the effective roll out and promotion of subsidised childcare; and the promotion of networking and improved support groups for parents and working families.
It says the insurance industry should institute a “Midlife Financial MOT” for women, promote better and earlier pension awareness and work with the new single financial guidance body to improve financial education and support for families and mothers.
The foreword to the report is written by Paul Lewis, presenter of the BBC’s Money Box who writers: I thought long and hard before accepting the offer from the Chartered Insurance Institute to write the foreword to Insuring Women’s Futures report and speak at its launch. But what struck me about its findings, one hundred years since some women first got the vote, is that if women don’t prosper, men don’t prosper. We all benefit from women having equal opportunities. And yet, men must recognise that so often it is they who block the way. So it is us who must open doors for them, and not just to the restaurant.
“If the insurance industry doesn’t acquaint itself with women’s real risks, or relate to women’s actual lives, then it will never be able to help women find solutions that work, for them. And even if it does all of this, if women don’t trust the industry, they won’t want to be its customers. This means the industry will miss out, women will continue to be worse-off, and society left facing deteriorating risks that the government alone can’t solve.”