Older women at risk of running out of money as gender wealth gap widens with age
Older women remain at risk of retiring without enough capital, despite being further into their careers, as the gender wealth gap continues to widen as they get older.
Women in the UK hold 21 per cent less wealth than men, but this doubles to 42 per cent by age 64, according to the latest research from Octopus Money.
The growing gap was pinned on a series of financial pressures women are likely to face over the course of their employment, including leaving the workforce for caregiving duties and for personal health challenges later in life.
Women in their early 20s initially hold slightly higher pension savings, but this changes around age 22 when women may first face structural and cultural barriers which prevent them from interacting with their pensions effectively.
Nearly 40 per cent of 18 to 24 year olds contribute nothing to their pension, with women of this age bracket accounting for 26 per cent not doing so.
Many women then lose capital when stepping out the workforce, with 70 per cent doing so between age 35 and 44, which is typically the period many find their earnings and career progression peaking.
This creates reduced income and significantly lower pension contributions, and causes financial confidence to drop from 38 per cent to 35 per cent upon reaching 55.
The confidence gap
Meanwhile, only 29 per cent of women were found to invest compared to 47 per cent of men, with women crediting their lack of doing so to being intimidated by the stock market.
A quarter reported having no savings at all, off the back of feeling the financial world and markets were not designed with women in mind.
But when women received personalised financial planning investment participation outside of pensions more than doubled, hitting 50 per cent from 22 per cent.
Advised women also overtook the male average of 37 per cent involved in investments.
Molly Pile, Financial Adviser at Octopus Money, said: “When women have less wealth, they have less choice, leverage and security, at home and at work. Financial marketing has historically used language that alienates women from engaging with pensions and investing from an early age, compounding structural disadvantages that follow them throughout their working lives.
“It’s never too late to get started… but we urgently need better financial education for women and a shift in how the industry talks to them about money.”