As this year’s International Women’s Day (March 8) will encourage people to ‘embrace equity’, research from Scottish Widows’ latest Women and Retirement Report shows that the financial gender gap continues to prevail with women from ethnic minorities facing an uphill battle at every stage of their financial life, compared to White women and the wider adult population.
But, before we share the details from Scottish Widows, here’s a reminder to check out the IFA Magazine special coverage of International Women’s Day, this Wednesday, 8th March:
International Women’s Day here on IFA Magazine: Are we missing a trick in financial services?
As IFA Magazine editor, Sue Whitbread, explains “Please watch out for our special International Women’s campaign this Wednesday, 8th March, right here on IFA Magazine. We’re flying the flag for women in finance and asking whether we really are ‘walking the talk’ when it comes to the benefits of diversity and inclusion in finance– or is it all just talk? We’re going big on it and getting quite excited – so make sure you check us out on Wednesday with loads of great coverage appearing via the link here to our IFA Magazine IWD Special We think you’ll like it!”
Now, it’s back to Scottish Widows!
Pension inequality
With 1.4 million women currently earning less than £100 a week through the state pension1, many women will face additional inequalities in their overall retirement savings. One in five (21%) Black women are ineligible for auto-enrolment pension schemes as they do not meet the £10,000 earning criteria compared to 17% of South Asian women and just 4% of White women.
Women from Black, Pakistani and Bangladeshi backgrounds also suffer some of the highest rates of unemployment in the UK, with 11% of the former and 12% of the latter out of work versus 4% of the country as a whole.2 Once in employment, ethnic minority women are then affected by the gender pay gap – with women in the UK earning almost £10,000 less than men, as the average male salary is £36,000 compared to the average female salary of £25,000.
Added financial woes
Ethnic minority women are also disadvantaged by a broad range of issues which intensify financial instability. For example, they are more likely to rely on rented accommodation with 62% of Black women renting compared to one in three (31%) South Asian women and one in four (26%) of White women. Just 12% of Black women own a home outright compared to 39% of White women.
Looking ahead, ethnic minority women are least likely to cite the state pension as a source of income for retirement (including only 32% of Indian women and Black women), and they are most likely to rely on cash savings which are under pressure in the current high inflation environment. In addition, more than half (54%) of Black women have little or nothing saved for retirement (compared to just 35% of White women), while over two thirds (68%) are concerned that they will run out of money during their retirement years which drops to 58% among White women.
Breaking the cycle of financial injustice
Despite the statistics painting a concerning picture of financial instability for ethnic minority women, there are solutions that will help to accelerate the progress towards equity. Government initiatives – such as lowering the pension auto-enrolment threshold from £10,000 – could make a positive difference, alongside improved advice to better equip women with the knowledge they need to effectively manage their finances.
These, and wider financial issues, will be tackled at the forthcoming Black Girl Finance Festival, which takes place on Saturday, March 11, at the University of Westminster. The event, led by author and financial influencer Selina Flavius, will see 100 women of colour gather to listen to a panel of Black and ethnic minority financial experts to discuss what more needs to be done to address financial inequalities for ethnic minority women.
Selina Flavius commented:“The findings are clear – urgent action needs to be taken now to ensure that Black women are not unfairly affected by a lack of advice and support while enduring unjust financial challenges. The ethnicity pay gap is a key contributor to this, which shows that Black, Asian and minority ethnic women earn lower salaries than White British women, which can undoubtedly have a negative impact on their financial resilience, long-term pensions and investment planning.
“During our inaugural in-person Black Girl Finance Festival, we are aiming to give women the tools to break unbalanced financial norms by empowering them with the knowledge that will help them financially thrive regardless of their circumstances. We are excited to bring together Black women and women of colour to lead, engage and share knowledge with each other in these timely conversations.”
Scottish Widows is partnering with Black Girl Finance, and the pension and insurance firm’s intermediary distribution director,Ranila Ravi-Burslem, will be speaking at the festival about financial resilience, retirement and pensions as well as the gender gap in financial advice. Ranila commented:
“Our research shows that Black women, and indeed many women from different ethnic backgrounds, are disproportionately affected by the impacts of pension auto-enrolment thresholds and the tough economic climate which are causing many of them to be in a financially vulnerable position as they reach retirement age.
“As International Women’s Day this year challenges us all to ‘embrace equity’ it’s a perfect time to focus on addressing some of these deep-seated issues. We’re calling on the Government to remove pension thresholds that unfairly affect women and put education programmes in place to bridge the gap for women from all backgrounds.
“The industry should also do more to support the work of the Money and Pensions Service (MaPS) to help women of all backgrounds to take stock of their finances and understand the importance of saving for later life. It’s time to break the cycle of financial injustice and we see this event as a crucial step in the journey to more accessible finance for all.”
Find out more about the Black Girl Finance Festival here: Blackgirlfinancefest.co.uk
Read the full Women & Retirement report here: scottishwidowsretirementreport.co.uk
International Women’s Day here on IFA Magazine: Are we missing a trick in financial services?
Watch out for our special International Women’s campaign this Wednesday, 8th March. We’re flying the flag for women in finance and asking whether we really are ‘walking the talk’ when it comes to the benefits of diversity and inclusion in finance– or is it all just talk? We’re going big on it and getting quite excited – so make sure you check us out on Wednesday with all our great coverage appearing here. We think you’ll like it!
