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Financial services industry must address ‘hidden’ factors that hinder women’s capabilities save And plan for life later, a new report urges.
The research, supported by wealth management firm Evelyn Partners, highlights how women are disproportionately affected by a lack of funds. retirement savings.
This should not be blamed on an alleged lack of financial confidence, the study added.
Government figures reveal stark differences: Median defined contribution (DC) average for men aged 59 is £75,000 pension wealth – a common form of private workplace pension – while women of the same age have just £19,000.
The report concludes that this large gender pension gap is caused by a number of factors, including the persistent gender pay gap, career breaks associated with raising children, increased part-time employment and the increased burden of unpaid care responsibilities on family members.
As people live and work longer, often in multiple occupations, the financial system must evolve to adapt to these changes and prevent the emergence of a “pension time bomb”, the report added.
“Financial services organizations often interpret women’s behavior as cautious, risk-averse or less confident. When we put these behaviors into context, a new picture emerges that more meaningfully guides support actions,” the report said.
“Women have fewer opportunities to make long-term financial decisions due to gender inequalities in earnings, time and uninterrupted working years,” the report said.
It argued that “the belief that men are more financially capable continues to influence women’s financial behaviour. The ‘confidence gap’ reflects stereotypes, not ability”.
It also says that the ongoing work of anticipating, planning and caring for others “uses up the same mental resources needed to plan for the future. This reflects overload rather than a lack of engagement”.
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Report author Emily Shipp, a psychologist and researcher at the Edinburgh Futures Institute (EFI), said the “confidence gap” narrative “hides the real systemic, situational and social factors that contribute to the pension divide”.
“Mental burden and time scarcity work together. Women are more likely to shoulder the ongoing cognitive labor of anticipating and coordinating care, while also spending more time on unpaid work. These pressures reduce the mental bandwidth and available time needed to sustain engagement in long-term financial planning,” she said.
“Historically, financial advice and pensions policy have often been centered around male, linear career trajectories and financial goals, rather than the multi-stage, care-interrupted lives that many women experience.
“As we move towards longer, multi-stage lives, redesigning pensions policy and the financial environment to better serve more diverse priorities and life courses will better serve all genders.”
With a DC pension, savers bear the risk of how much money they end up receiving in retirement, depending on factors such as contributions and investment choices.
Those behind the research believe this requires active engagement by savers, rather than just a “set it and forget it” approach, which is often poorly understood and leads to a decline in overall pension wealth.
Emma Sterland, chief financial planning officer at Evelyn Partners, said: “We welcome this important new report from the University of Edinburgh’s Future Institute. Its thought-provoking insights challenge entrenched narratives around women and wealth, revealing the complex structural barriers women face when building financial security throughout their lives.”
The report was produced by the Center for Financial Services Compassion (CFSH) at the Edinburgh Futures Institute.
CFSH co-director Tobi Schneider said: “This is an important report that recognizes that society is changing and financial planning is becoming increasingly necessary.
“As the population ages, if action is not taken, a large proportion of us will sleepwalk into financial disaster.”
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said measures were needed to help women stay in the workforce to see “meaningful change”.
“This includes providing more flexible ways of working, such as working from home, and the ability to more easily work around caring responsibilities,” she said.