On International Women’s Day, a new study has highlighted the effects of the gender pay gap on today’s generation.
As reported by The Mirror, the report found that rising debt, lower earnings and a lack of confidence when it comes to dealing with financial matters are putting young women at greater risk of being in poverty when they retire.
On average, men in the UK earn 18.4% more than women and the study by the Chartered Institute Insurance highlights the knock on effects of that unfair pay on today’s generation.
It found that student debt has almost doubled between 2001 and 2017. However, women are less likely than men to be able to repay those debts within a 30-year period because their earnings are lower, making it harder to save for their futures; and that’s before you even factor in loans, credit cards and overdraft debt.
Female teachers, social workers, nurses and midwives are all expected to have between £29,000 and £49,000 in outstanding debt after 30 years in work.
As well as having higher levels of consumer debt, women are also less able to repay it. The report blamed this on an ongoing gender pay gap, an increased chance of taking a career break to raise children and then returning to work in a lower paid job.
Although the pay gap is falling, at the current rate it’ll be more than 40 years until equal pay is achieved.
Jane Portas, lead author of the report, Insuring Women’s Futures Committee lead on Women’s Risks in Life and PwC Partner, said: “Women continue to have a fundamental lack of financial resilience to the risks they face in life.
“Many of the issues leading to women’s exposure to risk are deep rooted in society and will only get worse for the next generation unless we act now. We need to find new ways of educating and engaging young women and put policies in place that support them throughout their life.
“As a society, we need to improve women’s risk protection, economic independence and financial resilience, improving the financial future for us all.”
Young women are more likely to save than men but their financial circumstances means they’re not able to save as much.
1.5m 25-34 year old women have an individual savings account (ISA), compared to 1.38m men, but the average ISA balance of a woman in this age group is £5,118, compared to £6,180 for men. That means that by 65, men are likely to have saved five times more into a pension then women.
Worryingly, the average woman aged 25-39 also has £926 on credit and store cards, as opposed to £790 for men.
Total debts across 15-24 year olds grew by over 200% between 2006 and 2012 – 10 times faster than average debts of the wider population.