Millennial women expected to be worse off than their mothers and grandmothers – CII report
New research shows that while modern society affords women greater freedoms, their economic progress and financial resilience has not kept pace and they are profoundly more exposed to financial difficulty
Women today are living longer, have better education and more career opportunities, but they are likely to be worse off than their male partners, mothers and grandmothers, according to a new report out today from Insuring Women’s Futures.
Insuring Women’s Futures is a programme established by the Chartered Insurance Institute (CII) as part of the umbrella ‘Insuring Futures’ programme to bring together the insurance and financial planning profession to improve women’s financial resilience. A Task Force comprising senior representatives from across the profession has been established to act on the issues raised in this report.
Through its analysis of risk patterns, the research has highlighted that society’s risks are disproportionately borne by women. The ‘Securing the financial futures of the next generation’ report has identified six ‘Moments that Matter’ in girls’ and women’s lives where interventions could be made to address 12 Pitfalls and Perils and help secure financial futures for all.
1. Growing up, studying and re-qualifying. There is an urgent need to support girls and young women in understanding the risk versus reward of educational choices and a better understanding of money and debt to help them access valuable careers. Even though girls and young women are excelling educationally, the report highlights a Girls’ apprenticeship gap with young male apprentices earning 21% more than females due to the sectors they typically work in. There is also a Young women’s graduation burden with rising student debt being compounded for women by factors such as studying for degrees that lead to lower paid work, pay gaps, part-time working and disproportionate caring responsibilities resulting in it taking significantly longer for women to pay this off.
2. Entering and re-entering the workplace. The Gender pay gap will not close until at least 2050, women will work longer, through having children and later into life. In addition, women make up the majority of administrative and secretarial employees, which are at higher risk of being made redundant through automation. The report recommends supporting women’s pathway to career and employment to help them achieve their full potential in the workplace, and highlights the important role employers can play in setting women off on the road to improved financial resilience. The Female financial capability imperative identifies a need to support young women to understand financial matters, and to develop savings and pension routines early on.
3. Relationships: making and breaking up. The report identifies a need to improve awareness of risks to do with relationship status and to encourage more equal and independent financial management and later life planning. The doubling in cohabitation over the last twenty years risks a Cohabitation pitfall as cohabitees do not have the same rights as married couples - although 35% don’t realise this. While the majority still marry, over 100,000 marriages break down annually, making the Divorce and separation setback a key risk - divorced women have only £9,000 median pension wealth and separated women £0. Relationship break ups also increase women’s Domestic abuse danger and vulnerability to financial coercion.
4. Motherhood and becoming a carer. Women face a continuing Motherhood and caring penalty bearing the brunt of child and elderly caring, constraining their career and earnings. 43% of society think women should work part time and yet the Flexible working sacrifice identifies this is costing women a 30% reduction in hourly pay, on top of the cost of childcare. The report proposes a need for new approaches to support mothers and carers to achieve success in the workplace, manage childcare costs, to provide for themselves and plan for their financial future.
5. Later life, planning and entering retirement. Today’s young women can expect to work until they are 70 and yet women are now more likely to be carers in middle age with 1 in 4 women aged 50–64 having caring responsibilities compared with 1 in 6 men. On top of this more households now have dependent children at home in later life, with many women caring while trying to build a career and a pension leading to a significant Women’s pension deficit. At age 65–69 men’s average pension wealth is £179,091 – five times that of the average woman’s peak pension wealth.
6. Ill-health, infirmity and dying. The research revealed a Women’s wellness threat. Women’s lack of financial independence leaves them exposed if they or a partner become ill - 1 in 3 women in their 30s say their money wouldn’t last a month if they lost their main source of income. Young women facing high or very high health risk rose from 28% to 43% between 1994–2015. With life expectancy rising, women face 19 years ill–health compared with 16 years for men and a Longevity trap as they are increasingly likely to need home help and care towards the end of their lives. The average cost of for a 65 year old woman who needs to live in a care home is £132,000, nearly double men’s.
Jane Portas, Insuring Women’s Futures Committee lead on Women's Risks in Life, lead author of this report and PwC Partner said: “This report shows that despite their increased freedoms and progress, women in Britain today generally remain significantly dependent on their male partners, family and the state and fundamentally lack financial resilience. This means we are all exposed and has much broader implications for our society and economy. Many of the issues leading to women’s risk exposure are deep rooted. They will only get worse for the next generation unless we act now with fresh, innovate approaches and a change of mind-set.
“Improving outcomes for women requires collaboration between the insurance and financial planning profession, policymakers, employers and society. We need to find new ways of educating and engaging, consider policy approaches that can pave the way for alternative forms of access to risk and financial solutions, and to make financial planning and insurance more relevant and accessible to the many. And there needs to be more emphasis on the “whole person”, recognising there is no one size fits all. This report presents an opportunity for the relevant parties to join forces to improve women’s risk protection, economic independence and financial resilience, improving the financial future for us all.”
Inga Beale, Insuring Women’s Futures Patron and CEO of Lloyd’s of London commented:
“Much has changed in the century since British women gained the vote, but there is significantly more to do to support women’s equal progression, improve women’s risk resilience and secure their financial independence. The insurance and financial planning profession has a longstanding and valuable role in supporting society’s financial resilience, and this is opportunity for the profession to unite those who can influence change, and to apply its expertise for the benefit of society and its economic stability.”
Sian Fisher, CEO of the CII and Chair of the Insuring Women’s Futures Committee, comments on the research: “All of our risks in life are changing, and in many cases will be worse for the next generation than for the last. What is striking about this study is not just the level of risk to which women and society as a whole are exposed, rather the need for more radical approaches, the urgency to engage women on their terms, to equip and empower them to manage their own risks in life. Today’s women are simply unprepared for the risks that they face in life.
“We need to act now because if we don’t address this, we will not have the resources to sustain the current situation. To help drive this change we have established the Insuring Women’s Futures Market Task Force to work with the profession and collaborate with policymakers to effect innovative and broad change.”
The report was launched at the Chartered Insurance Institute in London on Tuesday 23 January 2018 to consumer groups and policymakers, as well as millennial women and senior executives from across the insurance and financial planning profession. The event was hosted by the Chartered Insurance Institute, as part of the Insuring Women’s Futures programme. The “Securing the future of the next generation: The Moments that Matter in the lives of young British women” report can be downloaded at