By Belinda Sullivan, Head of Corporate Consulting Strategy at Alexforbes
It will take another 132 years to close the global gender gap
South Africa ranked 20th out of 146 countries and 92nd for economic participation and opportunities according to the Global Gender Gap Report 2022.
Both men and women have the same needs and challenges in planning for their future:
- getting credit or financing for business
- managing debt
- needing long-term care
- outliving their money
- not saving or investing well enough
Unequal pay for similar work – even in retirement
“You deserve equal pay for equal work that you do,“ said President Cyril Ramaphosa during a reception for the women’s national soccer team Banyana Banyana in Tshwane. “I have been told that you get ten times less than what the men get when they play and that has to come to an end,“ he said.
South Africa ranked 123rd out of 146 countries in the Global Gender Gap Report 2022 for wage equity for similar work. Income during retirement is even more unequal. Men usually retire on 35% of their final salary (compared to 9% to 26% for women), according to Alexforbes Member Insights 2021.
The gender pension gap extends the gender income gap
Employment patterns and resulting pensions are related. You would typically live longer than men and spend more years in retirement. Consequently, you need a higher level of savings than men to achieve the same yearly income throughout your retirement years.
You could expect to live to 64.6 years compared to 59.3 years for men according to Stats SA 2021 data, even though Covid-19 has reduced life expectancy during 2021. You could spend more time living alone during your retirement years as women generally outlive their partners.
Unfortunately, financial wellness between men and women differs significantly as a result of the pay gap. This affects your ability to save as much as you need and get financing and credit.
Various factors in society affect your ability to save:
- Taking career breaks to care for your family
On average, you will be employed for fewer years than men. You are more likely to take a career gap to start a family or care for ageing parents, resulting in lower savings. Often, you might also cash in your savings to support the loss of income. This not only reduces the long-term compounding of savings, but depletes any money already saved.
- Working in more flexible jobs such as freelancing
There may be very little or no benefits available to you while freelancing. So you need to know how to plan for your future and what options you have.
- Saving smaller amounts each month
You would typically earn less than men, as is evident in the Global Gender Gap Report 2022. Therefore you will save less and receive less of a matching retirement contribution from your employer. In general, you would also manage the household bills and buy food for your family.
According to Alexforbes you need to:
- recognise that you have unique financial challenges as a woman and use support and guidance to manage these
- start saving as early and for as long as possible
- balance needs and debt over short and long periods
- understand options available if you stop work for a while and how to keep money invested for your future
- consider different investments for specific needs
- be active in making financial decisions
Education and advice help one to be financially savvy with higher levels of financial courage to improve their finances. People ought to reach out, get advice and empower their future selves.