Three ways to break the gender bias in the world of money

From the pension gap to the motherhood penalty, there are lots of ways in which gender bias shows up in the world of money.

When our financial coaches work with employees, we gather insights to help their employer better understand the financial health of their workforce. So, we see firsthand how gender plays a role in the way people feel about their money. 

Women typically have 13% less in their pension pots than men – meaning more working years if women want to retire as comfortably as men. We also find that women have up to a quarter less in their savings and investments than men (this is often called the “wealth gap”). 

Globally, just 28% of women feel confident about investing some of their money, and almost half (45%) say investing is too risky, according to a recent study by BNY Mellon Investment Management.

For many households, there can be a financial division of labour that has unintended consequences. Neasa McNulty, employer partnerships at Octopus Money, comments: “Often this leads to women taking the lead on day-to-day household expenses, while men are more confident leading on investment decisions and long-term financial planning.”

So, how can employers break the gender bias?

Financial education that’s designed for women

Higher salaries would enable women to accumulate larger pensions. So, reducing the pay gap is an important step towards addressing the pension gap. But it wouldn’t solve it completely. 

Building financial education programmes that acknowledge the differences in investing confidence, and signposting women to resources to help them understand their options and the impact of their decisions, is a good start.

  1. Lead from the front with female speakers and financial experts

Market research giant Ipsos told us recently that they brought a female financial adviser in to lead a financial wellbeing session in a bid to engage more women. According to Michaela O’Reilly, head of reward and HR analytics at Ipsos, it was their most popular session with 160 staff attending.

  1. One-to-one guidance

Coaches and advisers can provide education around the wonders of tax relief and compound interest. But for many women, any kind of financial education could be new and potentially intimidating. One-to-one coaching creates a safe space to ask questions, and helps clients visualise their long-term goals.

At Money we want to make sure talking about money is as easy, and accessible as possible. We make sure the experts employees speak to share their life experience – so 60% of our coaches are women.

Rhiannon Davies, head financial coach at Octopus Money, comments: “It’s never too early to educate people about financial planning – knowledge is power. As well as getting to grips with the financial products available, understanding your attitude to investing, such as your risk capacity and risk tolerance, is key.”

Neasa also comments: “The way we discuss financial success can be very gendered and this needs to change. Women who aspire to financial success can be seen as greedy; men, on the other hand, may be viewed more positively as ambitious or responsible”. 

Reducing the gender bias with childcare

When it comes to having children, gender bias becomes even more problematic. The burden of maternity leave and taking time off work for childcare generally falls to women and this can result in lost earnings and career progression opportunities. 

But employers can take an active role in tackling gender bias with childcare options. Flexibility and equality in parental leave can minimise the burden on women, as can offering job-sharing, condensed hours, remote working and career breaks. Reducing the stigma of men requesting time off to care for their children is vital. Mandating shared parental leave is a potential solution; this refers to parents taking equitable periods of parental leave for equal pay, and therefore being more equally financially capable of supporting their family.

Shah Abbasi, head of financial coaching at Octopus Money, would like to see employers make parental leave “opt-out”. He says: “This was a huge success with pension auto-enrolment. If it’s a decision not to take it, it totally changes your mindset. Because today, so many employees are confronted with feelings of guilt that it will negatively impact their career.”

He adds that financial coaches can be pivotal in addressing the unjust pay and pension gaps. “I really believe financial planning can be one of the most powerful ways of improving equity.” Coaches can help employees plan for how additional costs and reduced income will affect their personal finances. Where clients choose to take a career break, coaches can talk them through how to offset potential pitfalls, such as continuing to pay National Insurance contributions so they don’t miss out on state pension.

Bringing both partners into the conversation

Building a financial plan as a couple can help stop unconscious gender bias within a relationship, and empower a woman to feel more confident and knowledgeable about money matters. This is especially true for couples with children, or who are about to become parents, and those who share a mortgage.

It means tricky issues can be confronted head-on. For example, if a woman is taking unpaid maternity leave, should her partner pay her an income, or contribute to her pension?

Having both parents in the room for financial planning conversations will make sure expectations are set jointly on managing the costs of having children. By using open questions, a coach can help clear up any misunderstandings between a couple – and plug any gaps in knowledge – allowing them to have a frank discussion about their financial future.

Sometimes women will assume their ideal scenario isn’t possible – so they don’t even allow themselves to explore it. Octopus Money

recently helped a couple save together for shared childcare goals as neither wanted to take a career break. It meant they shared the cost and neither was disproportionately impacted as a result.

Our mission at Money is to transform lives by making financial coaching accessible and affordable to all. This commitment to financial inclusion for all means working hard to break down the barriers, taboos and bias associated with talking about money. 

We want to work with employers today, and every day, to #breakthebias for women in the world of money.  

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Octopus Money Limited is an appointed representative of Octopus Investments Limited which is authorised and regulated in the UK by the Financial Conduct Authority. Registered office: 33 Holborn, London EC1N 2HT. Registered in England & Wales under No. 14069098.

Octopus Money is a trading name of TW11 Wealth Management Limited. Registered in England and Wales (No. 10339119). Authorised and regulated by the Financial Conduct Authority. Our Financial Services Register number is 763630.

As with all investing, your capital is at risk. If you choose to invest with Octopus Money, the value of your investments can go down as well as up and you may get back less than you invest.