T
he gender pay gap affects not just current salaries for women, but their long-term
savings, and significantly affects women’s retirement income and financial security. Addressing these disparities requires a number of measures, including targeted policy interventions, such as equal pay legislation, paid family leave, and pension credits for caregiving periods in order to promote equitable retirement outcomes for women. For companies with international teams and those wanting to nurture women’s leadership and promotion, the issue of the gender wealth gap is particularly pressing. This is a subject which was
hotly debated at our conference for International Women’s Day, which looked at workplace policies and actions we could all take to support women and girls progress in their careers and reach their full potential.
PENSION WEALTH DISPARITIES As an example, the European Journal of Population Study Pension Wealth and the Gender Wealth Gap (2022) provides a comprehensive analysis of pension wealth disparities between men and women across Germany. It identifies significant gender gaps in statutory, civil, and occupational pensions, with occupational pensions showing the largest disparity (41.8%). The study attributes these gaps to differences in labour market participation, earnings, and the types of employment contracts held by men and women. While the relative raw gender wealth gap is about 35% (or 31,000 euros) when analysing the
standard measure of net worth, it shrinks to 28% when pension wealth is added, the study reports. In the UK, Institute for Fiscal
Studies (IFS) published a report in March 2023 on The Gender Gap in Pension Saving, examining the differences in pension incomes and savings between men and women. It highlighted that while the gap in state pension income has narrowed, significant disparities remain in private pension savings, primarily due to differences in earnings, employment patterns, and caregiving responsibilities. “Women – who have lower
lifetime earnings on average and have longer retirements – are likely to continue to have lower retirement incomes than men,” the IFS report says.
LOWER EARNINGS POTENTIAL Sam Bourgi, an analyst at Investors Observer, argues that the issue is not just what women are paid now – it is how the cumulative effects of inequality affect their entire financial lives. In his analysis of women’s earnings and lifetime wealth in the US, he has uncovered major disparities in the financial fortunes of men and women. “Leadership and promotional
barriers, maternity leave, and salary negotiations are among the costliest inequalities for women,” he says. “Wealth accumulation in the
stock market is also a reflection of lifetime earnings potential,” he notes. “Since men have higher lifetime earnings than women, on average, they can invest more money in the stock market, which results in a much larger portfolio when it’s time to retire.”
The roots of this disparity stretch
back to leadership barriers, wage negotiation gaps, maternity leave, and the often invisible cost of unpaid care work – all disproportionately borne by women. Research by Investors Observer found that women lose $1 million USD in retirement wealth due to the gender wage gap in the US.
UNDERREPRESENTED AT BOARD LEVEL The Department for Work and Pensions published a report on the Gender Pensions Gap in Private Pensions in June 2023 and found that women’s private pension pots in Britain are typically worth 35% less than those of their male colleagues by the time they reach 55. Equally in the US, Sam Bourgi
says that there has been a noticeable failure to close the gender pay gap, despite women’s increasing presence in high-paying industries. “Women are increasingly present
in high-paying roles and sectors, but they are still underrepresented in
“ WOMEN – WHO HAVE LOWER LIFETIME EARNINGS ON AVERAGE & HAVE LONGER RETIREMENTS – ARE LIKELY TO CONTINUE TO HAVE LOWER RETIREMENT INCOMES THAN MEN.” THE IFS REPORT
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GLOBAL LEADERSHIP
FINANCIAL INEQUALITY
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