A campaign based on claims about the size and duration of a male/female pay gap has sparked controversy in the UK, while a survey from a private bank shows concerns over whether women are falling behind in planning for retirement.
Claims that women get a rough deal in terms of pay and financial services in the UK don’t appear to be going away any time soon, at least judging by two very different reports issued to coincide with the Equal Pay Day campaign taking place today.
In late October, the Fawcett Society, which campaigns on issues such as demands for equal pay for women, said that according to its data, the mean average for full-time work is 14.1 per cent. Figures from 2016 were revised up from 13.9 per cent to 14.1 per cent - meaning that the gap has now been static for the last three years, it said. The comments come ahead of laws next year that will, from April, compel large firms to publish their gender pay gap.
A London-based think tank, the Institute of Economic Affairs, however, says the Fawcett Society’s stance is misleading and has contested the group’s statistics and reasoning. In another stir of the debate, a survey by Close Brothers and the Pensions and Lifetime Savings Association says women feel far less prepared for retirement than men and have less money put aside.
Such debate comes at a time when the wealth management industry, for example, is often chided for being an excessively male-dominated profession in the UK and overseas, at odds with how women make up over half of the world’s population and increasingly hold wealth.
The IEA said the official gender pay gap, based on data from the Office for National Statistics, the UK’s public data body, is 9.1 per cent for full-time workers in favour of men, and -5.1 per cent for part-time workers in favour of women. These figures are calculated by using the median hourly earnings of full-time and part-time workers, excluding overtime. The IEA said the Fawcett Society uses the mean calculation of ONS data to inflate their figure to 14.1 per cent and that this approach “moves away from like-for-like comparisons between workers”.
The EPD briefing also excludes the only region with a negative gender pay gap, Northern Ireland, from its table, the think tank continued.
The IEA said compelling businesses to publish their pay gaps will likely cause confusion about wage differentials and may even create perverse incentives by firms to hire fewer female graduates into junior roles.
“The Equal Pay Day campaign does nothing to advance women in the workforce; even worse, it seems to be covering up the major successes that women have had, particularly in Northern Ireland. Omitting the one region with a negative gender pay gap from its table tells us everything we need to know about the aims of this campaign - it is perpetuating a victim-hood narrative, deliberately leaving out information that should be cause for celebration,” Kate Andrews, news editor at the IEA and author of its report, said.
"Evidence we have suggests young women entering the workforce have every reason to believe that they will receive equal pay for equal work. Yet they are bombarded with inflated and manipulated statistics, designed to make them feel helpless - at the mercy of Big Brother's protections. This is the polar opposite of empowerment. Working women are doing far too well in Britain to be held back by this kind of outdated campaigning,” she said.
More than half of female employees (51 per cent) admit to feeling financially unprepared for their retirement compared to 35 per cent of male workers, Close Brothers and PLSA said in its study. Female workers are twice as likely to have less than £5,000 in workplace savings compared to their male counterparts; male workers are saving forty percent more over the course of a year; £3,660 vs £2,652. The average amount in a woman’s workplace pension scheme is less than half that of their male colleagues (£53,000 vs £120,000), it continued.
Among other details, the survey found that a third (36 per cent) of female workers feel confident about choosing the right financial product, compared to 45 per cent of men.
More than half of female employees admit to feeling financially unprepared for their retirement, the research found.
“The savings crisis is thrown into stark relief when looked at under the lens of gender imbalance. Women are not only earning less and therefore saving less, but are significantly less confident about the savings options available and how to choose what’s best for them. Women are more likely to trust friends and family or personal savings websites, which are unlikely to be able to provide suitable and comprehensive information across the entire savings landscape,” Jeanette Makings, head of financial education at Close Brothers, said.
“Financial educators, like employers, are better placed to offer guidance and information, but they need to consider the diverse needs of their audience, including what style and content suits the individual members of their workplace. We work closely with employers to deliver effective education incorporating different savings techniques, goals, and needs.”
The survey was based on a survey conducted amongst 1,000 employers with 200 or more employees and 2,009 employees from companies with 200 or more employees.