March 8 marks International Women’s Day – a global celebration of the social, cultural, and political achievements of women. This important awareness-raising event is also a call to action for accelerating women’s equality.
Encouraging new research by Fidelity has revealed that 53% of women now feel financially independent – a higher number than at any other point in the last three years.
However, there remain several “gaps” between the financial opportunities men enjoy and those available to women.
Read on to learn more about the top three financial challenges women may face and find out how your female clients could overcome them.
1. The gender pay gap
The gender pay gap measures the difference between the average earnings of men and women. In the UK, this figure has fallen over time, but it still exists.
In October 2024, the Office for National Statistics (ONS) reported that the gender pay gap among full-time employees was 7.0% in April 2024, down from 7.5% in April 2023. Among all employees, the gender pay gap decreased to 13.1% in April 2024, down from 14.2% in April 2023.
The gap varies by sector, region, employer size and age. For example, the ONS figures reveal that there is a greater disparity between men and women’s pay for employees aged 40 years and over than for younger workers. Additionally, the gender pay gap is larger among higher earners than among lower-paid employees.
There are many reasons why women earn less than men on average, including:
- Unpaid caring responsibilities – Research published by FTAdviser has found that on average, women spend 10 years away from the workforce to raise children or care for other family members. This could affect a woman’s career development and earning potential.
- Part-time working – According to figures reported by the Chartered Institute of Personnel and Development (CIPD), 71% of part-time workers are women. Part-time hours are likely to result in a lower salary than a full-time role might provide. What’s more, the CIPD report revealed that hourly rates of pay tend to be lower for part-time work than for full-time employment.
- Pay discrimination – Gender bias and stereotypes can lead to women being paid less for the same work as men. Indeed, HR Magazine has revealed that equal pay claims against employers for gender pay discrimination rose for the third consecutive year in 2023.
Unfortunately, this is not an exhaustive list, which demonstrates the size and scope of this financial challenge for women.
2. The gender pension gap
Not only could lower pay make it harder for your female clients to build their wealth, but it may also contribute to the gender pension gap.
This gap is the percentage difference between female and male uncrystallised average pension wealth around the normal minimum pension age (55, rising to 57 in April 2028).
The most recent government data shows that the gender pension gap sits at 35% (32% for those who qualify for auto-enrolment).
Furthermore, a report by NOW: Pensions shows that women retire on average with pension savings of just £69,000 compared to £205,000 for men.
This could represent a significant financial challenge for your female clients, especially as women have a longer average life expectancy than men. As a result, their retirement savings may need to stretch further.
So, your female clients might need to think carefully about saving and investing for the retirement they desire.
3. The gender investment gap
Developing a strong investment portfolio could help your clients build the wealth they need to progress towards their long-term goals.
Yet, a study by Aviva has revealed that 37% of women do not invest any of their wealth, compared to 24% of men. Additionally, men are almost twice as likely to invest in Stocks and Shares ISAs, self-invested personal pensions (SIPPs), or General Investment Accounts (GIAs).
Research published by the Harvard Business Review suggests that this investment gap could be due in part to women being typically more risk-averse than men.
This lack of investing confidence could limit your female clients’ opportunities to accumulate the wealth they need to ensure their long-term financial security.
How your female clients could overcome common financial challenges and build their wealth
Fortunately, there are steps women can take to mitigate the financial challenges they may face, including:
Make the most of tax-efficient savings
Your female clients could make the most of their income – whatever that may be – by ensuring that their savings are as tax-efficient as possible.
They can contribute up to £20,000 (2024/25) annually across most adult ISAs without paying Income Tax or Capital Gains Tax (CGT) on any interest or returns they earn. If your client has a partner or spouse, they could collectively save up to £40,000 tax-efficiently in ISAs each tax year.
Your female clients may also want to consider opening a Junior ISA (JISA) for their children. They can contribute up to £9,000 a year tax-efficiently across Cash JISAs and Stocks and Shares JISAs (or in a single account). This won’t affect your clients’ adult ISA allowances.
With the end of the tax year rapidly approaching on 5 April, your female clients may want to make the most of their annual ISA allowance before it resets.
Prioritise pension contributions
Accumulating a healthy pension pot could provide your female clients with invaluable peace of mind and financial security.
A financial planner can use cashflow modelling to help your clients understand their retirement income needs and assess whether they’re on track to achieve their goals.
If it looks like there might be a shortfall, your clients may want to consider increasing their pension contributions.
Thanks to generous tax relief and employer contributions, boosting their payments by even a small amount could significantly enhance their retirement income. Indeed, your clients could benefit from between 20% and 45% tax relief, depending on their marginal rate of Income Tax.
Additionally, maintaining regular contributions – or asking their partner to pay into their workplace or private pension – during any breaks from paid employment, could bolster your clients’ retirement fund.
Work with a financial planner to boost investing confidence
If you have female clients who feel that investing their hard-earned money feels too “risky” or complicated, they may benefit from financial advice.
A financial planner can help them design an investment portfolio that aligns with their attitude to risk, desired time frame and long-term goals.
As such, your clients may become more confident about investing, which could allow them to accrue the wealth they need to overcome their financial challenges.
Get in touch
If you have any questions about how we could support your female clients to overcome their financial challenges and build the wealth they need, please get in touch.
Email hello@sovereign-ifa.co.uk or call 01454 416653.
Approved by Best Practice IFA Group Ltd on 11/02/2025
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate cashflow planning or tax planning.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Workplace pensions are regulated by The Pension Regulator.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
