New report reveals gender wealth gap

WOMEN in the UK are considerably worse off than their male counterparts, a new research study by Handelsbanken Wealth and Asset Management shows, with women holding an average of £147,000 in financial assets, compared to £250,000 for men.

Handelsbanken Wealth and Asset Management's report:- 'Gender and generation: unravelling the wealth gap' highlights how the gender divide in financial literacy and confidence in investment markets and products is impairing women's ability to build wealth, while also exploring how younger and older generations are experiencing the financial world differently.

The research reveals that just 18% of adult women feel they received a good education on managing money in School compared to around 24% of men. This contrast is starker amongst the younger generations, with 46% of men under the age of 30 believing they had received a good education, compared to just 28% of women within the same age bracket.

This may go some way to explaining why more women than men in every age bracket admit to having limited or no understanding of financial products such as investments, mortgages, pensions, and insurance. Notably, 69% of women claimed to have little or no knowledge of investments compared to 43% of men, while 56% of women admitted to the same for pensions, compared to 37% of men.

According to the study, women are more likely to have oversight of day to day household finances like groceries and bills (80% versus 69%), while men tend to take the lead on financial products such as:- credit cards (58% versus 52%), pensions (47% versus 31%) and investments (40% versus 19%). When it comes to finance, the traditional stereotype of women managing household budgets while men take care of financial products and services is appearing to linger.

Men were also found to be much more comfortable taking a high risk, high reward approach to investing, with women proving far more risk averse. 46% of women stated they would feel uneasy or panicked about picking an investment with the potential for large gains but also the risk of large losses, with 34% saying they would never pick a high risk investment at all. Meanwhile, only 10% of men admit to feeling very uncomfortable with the idea.

Tellingly, wealthier consumers were more likely to embrace higher risk investment options. 82% of people with assets of over £100,000 felt comfortable with a higher risk product in their search for higher returns, compared with 68% of those with assets under £100,000.

The research also found that men are far more likely to feel confident offering financial advice to friends and family (41% versus 29%).

Given their lack of financial confidence, it comes as no surprise that women feel more comfortable discussing their finances with other women; potentially feeling less judged or belittled. The research showed that on average, 69% of women would prefer to speak to a female financial adviser, although this does flatten with affluence; 71% of women with less than £100,000 in financial assets would prefer a woman, compared to 54% of those with over £100,000.

PK Patel, Head of Wealth Management at Handelsbanken Wealth and Asset Management said:- "Another year, another International Women's Day; and yet more evidence highlighting the ongoing disparity between:- men's and women's finances across the country. The gender wealth gap created by historical and systematic factors will take many years to close out, particularly as young women still feel that they have not received a proper financial education. Building financial literacy and confidence among women of every age is key to turning the tide and reaching an equal level of wealth generation. As wealth advisers, our goal is to address this disparity by empowering women to feel confident and secure in building a stable financial future best suited to their needs, be that through checking our own biases and behaviours as trusted advisers, holding women-centred events, or directing customers to the best available learning resources."

Handelsbanken Wealth and Asset Management offers financial learning resources for interested parties through their Learning Zone.

This report follows Handelsbanken Wealth and Asset Management's inaugural national Wealth Survey in 2023:- 'Can we solve the gender wealth gap?,' which also delved deep into the issues surrounding wealth, personal finances and long-term financial planning amongst men and women in the UK.

Sticky Floors: Only 26% of working class female professionals have been offered a promotion at their company

26% of female professionals from working class backgrounds have received a promotion at their current company; 59% of female professionals from upper middle class backgrounds.

In light of International Women's Day, specialist recruitment company Robert Walters releases new figures on the pay and progression of women from working class backgrounds in the UK and Ireland.

Social Mobility's 2023 report found that on average, professionals from working class backgrounds are paid 12% less a year; which means they are working one out of every 8 days for free.

However... new research from Robert Walters' annual ED&I report highlights how inequalities are disproportionately impacting working class women's rates of progression and pay; as they are forced to carry the double burden of both class and gender pay gaps.

Coral Bamgboye, Head of Equity, Diversity and Inclusion at Robert Walters UK:- "We are conscious of the glass ceiling stalling the progression of female professionals however, our research attests to 'sticky floors' placing further constraints on female professionals from working class backgrounds."

26% of women from working class backgrounds have received a promotion at their current company; 20% less than their male counterparts and 34% less than women from upper middle class backgrounds.

Not only that, but 32% of women from working class backgrounds report not being at all aware of what they need to do to get a promotion; the highest across gender and socio economic class.

Coral comments:- "The poor promotion rate of working class women is closely tied in with their limited awareness of the steps necessary to secure 1. Disparities start to form right from higher education when it comes to career advancement; with working class women struggling to easily access or afford career advice, work experience or unpaid internships at School, right through to mentorship opportunities goal-setting resources and clear pathways upwards at work. This has a knock on impact on progression; leading them to become stuck in junior positions on significantly lower rates of pay."

Women from working class backgrounds bear a double burden when it comes to pay; grappling with both the class pay gap of 12% and the gender pay gap which sits at 7.7% for full time employees in the UK.

The Robert Walters report found that 52% felt underpaid at work; 17% more than women from upper-middle class backgrounds.

Whilst 50% of women from working class backgrounds experience a salary ceiling of £21k; that is twice the rate of men from similar backgrounds:- 25% and 32% more than female professionals from upper middle class backgrounds (18%).

The gaps are even more pronounced further up pay brackets; just 1% of women from working class women are earning between:- £55to 100k (group least likely to be earning in this bracket) compared to 19% of women and 29% of men from upper middle class backgrounds.

A recent study by Money.Co.UK found that on average, women save 35% less than men; so, they have less of a safety net from cost of living hikes.

Robert Walters' report found that women from working class backgrounds are most likely to either be living paycheque to paycheque (31%) or relying on additional streams of income:- 20% to 14% more than men from similar backgrounds and over double the number of men from upper-middle class backgrounds.

Despite being on the lowest rates of pay, 64% of women from working class backgrounds haven't negotiated for a raise in their entire career (the highest across all genders and socio-economic groups).

Factors preventing working class women from negotiating:-

• 26% did not think their employer would offer them a pay rise... 10% more than upper middle class women.
  

• 22% lacked the confidence to negotiate... 10% more than men from similar backgrounds.
  

• 12% did not negotiate due to their company's low profit / cost cuts... twice the amount of men from similar backgrounds.

Of those who did negotiate, 26% received their desired raise and 32% did not receive any of raise at all. Whilst 64% of men from upper-middle class backgrounds received between:- 50 to 100% of what they negotiated for.

Coral comments:- "It's clear to see why rates of pay for women from working class backgrounds are lagging and the:- 'sticky floor' problem persists; with employees suffering increasing pay instability as the cost of living continues to rise. What is more, when this group feel empowered to negotiate for more, they are then faced with diminished chances of success. Therefore, as businesses we have a role to do more than simply advertise that:- 'these advancement opportunities exist."

Coral's advice on how companies can clean up sticky floors and uplift working class women:-

• Equal advancement opportunities; introducing mentorship programmes for professionals targeted at lower socio economic classes can support their professional growth and prevent them hitting progression ceilings. It is not only important that all employees are provided with clear paths to progression but that promotion processes are always transparent.
  

• Transparency on pay gaps; women from working class backgrounds are met with a double burden when to comes to pay; impacted by both the class pay gap and the gender pay gap. That is why it is more important than ever for companies to report transparently on their own pay gaps and coordinate a strategy to address them.
  

• Employee Resource Groups (ERGs) having specific ERGs can help provide a sense of community and support for professionals from similar backgrounds.
  

• Ongoing assessments and adjustments; As an employer, it is important to constantly be assessing your own culture and levels of inclusion; from the start of the hiring journey to on the ground within the workplace. Through implementing things like anonymous surveys and evaluations, regular Q&As and open discussions.