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Over the past two years, UK-registered companies (with over 250 employees) have been required to publish their gender pay gaps highlighting, particularly in the financial services sector, that women are being paid far less than men. Unfortunately, financial inequality doesn’t end there.
What appears to have slipped under the radar is the alarming differences in men’s and women’s pensions across the UK population.
It has recently been estimated that the gender pensions income gap stood at 39.9%* with the average female pensioner £7,000 p.a. poorer than their male equivalent indicating just how far behind women are in terms of their savings for retirement.
Although similar factors could be behind both salary and pension gaps – such as maternity leave, lack of flexible working preventing a return to work and less women in senior roles, it has been indicated that there could be many more factors at play; the language used in the marketing and advertising for savings and investments products being geared towards men, the notion that men tend to make the bigger financial decisions in a household and, due to the gender pay gap, men having more disposable income.
Amid a focus on a pensions crisis in the UK, clearly action needs to be taken to address this huge gap, and quickly.
In order to explore the causes of such a high gender pensions gap and in an exciting development for me as someone who is so passionate about diversity in the investment industry, Research in Finance and City Hive, the network for change in the asset management industry, have joined forces to unearth the root causes of this financial inequality and, more importantly propose solutions that will encourage more pension saving and investing by women, while also providing investment businesses with opportunities to expand their client base.
With the support of key asset management players, Research in Finance will survey over 2,000 individuals (male and female) to understand the differences in their financial decision-making behaviour. To carry out further exploration, focus groups will be held across the country to gain a detailed understanding of the individuals behind the stats and draw insights from a spectrum of women in a mid-career age bracket, of varying occupations and income level.
The research objectives include:
• Ascertain the levels of knowledge and engagement around financial literacy
• Pinpoint causes of the pensions gap and barriers to addressing it
• Encourage understanding, knowledge and participation in the industry
The latter point is the most important; with the information we find we plan to help asset managers better understand the financials needs of women in their client base, their investment profiles and behaviours, and ultimately encourage the industry to work together in closing that near 40% gap in pension pots.
The report is expected to be published in the first half of 2020.
*For 2017-2018, according to Tackling the Gender Pension Gap 2019 by Prospect
That might seem an odd question coming from someone who makes their living from the stuff but it’s a question I have been asking myself for a while now.
For years, I’ve commissioned research for the brands and the businesses I’ve worked for. Whether it be to redesign a magazine or website or to launch a new event or product, research amongst clients, customers and audiences has been critical to the decision-making process.
For the last two years however, through Rii, I have turned provider, so I’ve been thinking a bit more fundamentally about it all.
And here is what I’ve found in my own research on research. It touches almost every aspect of our lives from the vitally important to the mundane and largely, we don’t even notice it.
Without research, we would live in a world of guesswork and hunches. Everything, from the average Joe searching for a new recipe for dinner (that’s usually me) to deeply clever people (that’s usually someone else) exploring the concepts of space and time, requires research.
Whether you are scouring the reviews on IMDb before choosing what film to go and see or are devouring baby books before the birth of your first child, research enters so many aspects of our day to day lives.
No successful film is made, or book written without a huge amount of preparation going into it. Which requires research, and lots of it.
No business is set up or strategy launched without months (sometimes years) of research, planning and testing taking place.
And no scientific breakthrough or cure for illness is ever achieved on someone taking a punt.
Of course, there is a huge variety in the type of research that is being applied in each of these examples but the common denominator in all of it is the purpose – to undertake an investigation of some kind to establish facts or reach new conclusions.
But what you do with those facts or conclusions is vitally important. Insight without action removes half of its value, to leave it occupying the “that’s interesting” space.
Through research, we are trying to tame a world of chance and chaos and make success more likely, whether that be increasing the likelihood of enjoying a film or reducing the chances of raising a career criminal. And that’s important.
The applications in business are no less pertinent or important. Insight allows you to get much closer to understanding what it is you need to achieve and how to go about achieving it. It allows you to really understand what your customers, employees or peers think of your business and its services.
It can help you identify opportunities that might otherwise have been obscured from your vision. And it can reaffirm that your instincts were either right or wrong and help you form a plan of action on the back of it.
Ultimately, it provides a much greater level of certainty and comfort so that when you do take the plunge, you’re more likely than not to come up swimming.
Research seeks to bring us closer to the truth of whatever is being investigated. It looks to go beyond the “I reckons” and get to the “I believes” and that level of certainty is invaluable, regardless of the application.
So where has all this thinking taken me? To the conclusion that the truth is out there, and it comes in the form of research …
Phil Davison, MD, Research in Insurance