Significant pay gap has 'profound effects' on women – report
A new report from the Chartered Insurance Institute reveals the risks a woman faces over her lifetime: lower earnings, insecure work, distinct health risks and increased likelihood of domestic violence.
Women face a significant pay gap which has "profound effects" on life choices, independence, resilience to financial shocks, and preparedness for later life, a new report has found.
Women’s Risks in Life: An interim report into risk, exposure and resilience to risk in Britain today, from the Chartered Insurance Institute (CII), revealed women working in their 40s earn 12% less than men. On average women in full-time work earn over 9% less than men, down from 17% in 1997.
Sarah Champion, Shadow Women’s and Equalities Minister said the report’s findings are “disturbing, but are sadly no longer surprising."
The MP continued: “86 per cent of net savings to the Treasury through tax and benefit measures since 2010 have come from women. Coupled with the shameful gender pay gap and record levels of maternity discrimination in the workplace this means that women across the UK are materially disadvantaged financially compared to men.
“The Tories have consistently failed women economically. By failing to gender audit their own economic policies and to address the gender pay gap, they are shutting their eyes to this systematic injustice.
“A Labour government will commit to gender auditing all economic policies in order to stamp out financial inequality once and for all.”
The CII report also revealed that women pay substantially more for care than men do. Women tend to live longer: a girl born in 2014 can expect to live to 83, nearly four years longer than a boy born on the same day. This, combined with the fact that most women in the bottom 40% of households by household income have no pension wealth at all, means gender seriously affects care costs.
At age 65, women can expect to pay £70,000 for care throughout old age, compared with just £37,000 for a man. A woman entering a care home between the age of 65 and 74 can expect to stay for four years, at an average cost of £132,000. Costs in some areas are far higher, with an average of £186,000 in the South East. These figures are the average, and some may face longer stays and far higher costs.
The report also shows women are more likely to say they will be reliant on the state pension as their main source of income in retirement (36% of women compared to 30% of men) – women who are divorced, separated or widowed are particularly likely to be reliant on the state pension.
Throughout their life, the CII showed, women are more likely to be in insecure and temporary work and are more likely to feel financially insecure.
As many as 1 in 2 women with three or more children say their money would not last a month if they lost their primary income, compared with just 1 in 4 women without children.
Women are also more likely than men to provide unpaid care which limits their ability to work, thereby contributing to lower incomes and savings and consequently a lack of resilience to financial shock.
Women are more likely to be on zero-hours contracts (3.4% compared with 2.4%) and temporary contracts (6.6% compared with 5.8%), and they are more than three times as likely to be working part-time than men (42% compared with 13%).
Elsewhere in the report, it warns that women are much more likely to suffer domestic abuse than men, including violence and financial coercion.
Furthermore, it reveals women face a distinct health risk from their gender and are more likely to suffer from mental health problems.
The report urges the Government to gain a better understanding of household dynamics, choices and financial decision making, approaches to risk mitigation and financial planning.
It also recommends improving our understanding of how women of particular groups within society are affected, including regional differences, cultural differences, such as ethnicity, LGBT, religion, and women from different economic and educational backgrounds.
Sian Fisher, CEO of the CII and Chair of the Insuring Women’s Futures (IWF) Committee, said:
“Women today are left disproportionately exposed to risks that society is not overtly recognising. This is at the same time as historic support systems are receding. We are moving from a dependence culture to one of independence, where we will have to be less reliant on our partners, families, communities and the state, and must take charge of our own financial welfare. Yet today’s women are simply unprepared for the risks that they will face in life.
“This is not just a ‘women’s issue’, it is a wider risk for society because if we don’t address it now, we will face a huge burden of care that we will not be able to sustain.”