International Women’s Day (IWD) falls on 8th March each year, to celebrate women’s achievements and raise awareness about discrimination, and the progress towards gender equality.1 2024’s theme is ‘Inspire Inclusion,’ which the UN has refined to ‘Investing in Women to Accelerate Progress.’2 In recognition of this year’s theme, we’d like to take the opportunity to explore some of the ways that employers can invest in the women in their workforce, and how this accelerates progress.
Gender inequality remains a widespread challenge, and changes in the workplace are still needed to drive gender parity. Many companies are now required to publish their gender pay gap, shining a light on those that need to make progress. According to the Office for National Statistics, the gender pay gap in the UK actually increased last year, from 7.6% in 2022 to 7.7% in 2023.3 The gender pension gap is now recognised as an integral component of the overall gender pay gap. Scottish Widows’ Women and Retirement Report 2023 shows that “women are forecast to receive 37% smaller private pension pots at retirement than men (c£150k compared to c£235k, in today’s money).” The average woman is on track to receive £12k in today’s money in annual retirement income, after living expenses, compared to £19k on the same basis for the average man. This includes private pensions, state pensions and other forms of income.4 To put this in context, the Pensions and Lifetime Savings Association’s recently updated Retirement Living Standards has set £14,400 as the income needed for a single person to meet minimum retirement living standards. The average woman is falling well short of this minimum standard.
As we can all understand, the reasons for such differences between men and women’s pension pots are multi-faceted. The complexity of this challenge was highlighted by work undertaken by the Chartered Institute of Insurance (CII) in 2018, looking at the ‘moments that matter’ for women through their pension lifetime.5 This also highlighted the practical steps that employers can take, to get closer to gender parity.
First we’ll look more broadly at company culture, and how this informs more inclusive employer policies and business performance. By inspiring inclusion, women’s contributions are better recognised, and we encourage the removal of barriers to gender equality. This helps in establishing environments where women are valued and respected, not only driving equality but resulting in better decision-making and business outcomes. In 2023, McKinsey reported that “companies in the top quartile for board-gender diversity are 27 percent more likely to outperform financially than those in the bottom quartile.”6 Companies should review their talent management policies and how conducive they are to recruiting, retaining and developing female talent. David Piltz, Chief Executive Officer at Gallagher Benefit Services UK, reports that “investment in women and creating a female-inclusive work environment is a priority for AJG/ Buck UK and it is recognised how this has contributed to achieving business goals.”
When it comes to pensions and benefits, companies can invest in tailoring these to better support the female population. Corporate policies need to consider holistic health and wellbeing, of which financial wellbeing is a crucial component – now more than ever. Employers should appreciate how that might vary among their employees, with different requirements and priorities. By performing analysis on how their employee demographic responds to communication styles, employers can implement more inclusive and gender-aware communications. This can boost engagement with benefit programmes and pension saving plans, and make a real difference in reducing the disparity between different groups’ uptake.
Implementation of the following company-funded and voluntary benefits can improve gender parity:
- Life assurance – Though this is changing, women are often not the primary earner in a household. They typically have more time away from work due to maternity leave(s), caring for children and elderly relatives – and life assurance is often a forgotten benefit. On 1st Feb 2024 Forbes reported that “women overlook the benefits of cover.”7 Life assurance provides enhanced financial security for the family, and spouse/partner policies can be provided though flexible benefit schemes.
- Income protection – REBA reports that sickness-related absences have the biggest financial impact on women, and that “women are closer to the breadline if they lose their income. On average, women are able sustain living costs for just 14 days compared with the average male, who can cover costs for 28 days.”8 Income protection gives increased financial security, and should dovetail with any short-term sickness policy. Swiss Re’s 2022 Group Watch Report shows that of the total employees covered under UK group policies, only 40% were female.
- Critical illness – Cover designed to pay a lump sum benefit of in the event of a serious illness such as heart attack, stroke, cancer (subject to insurers’ policy definitions). The benefit is paid tax-free and could be used for any reason, such as paying for adaptations at home, paying off a mortgage and providing additional financial support during a period when income may be reduced. According to Swiss Re’s Group Watch Report 2023, women are less likely to take out critical illness cover, and so closing this gap could provide women with added financial security.
- Private Medical Insurance – Providing an alternative and quicker route to treatment via the NHS. Cover can be provided for the employee only, or extended to cover for their family. Depending on the cover, pre-existing conditions prior to the start of the cover may or may not be included. The cover generally usually covers acute (short term / unforeseen) conditions rather than long term (chronic) conditions. Many insurance policies now have a specific focus on female health, with specialist support for fertility, menopause and women’s cancers, responding to increased demand for women’s healthcare benefits that cover their particular needs.
- Digital GP access – A quicker way to book an appointment with a GP, often within 24 hours or less via telephone or video. Children’s appointments may also be covered by the provider, offering parents more flexible and efficient access to family healthcare.
- Health screenings and preventative care – These can be another opportunity to implement and raise awareness about tailored employee benefits, providing women with screenings to address the risks most relevant to them. This can include specific screenings such as for breast and cervical cancer, and women’s screening packages focused on female risk factors.
- Pensions – Numerous reports, including the work by the CII and Scottish Widows already mentioned, highlight not only the impact of unequal pay and events such as career breaks on the gender pension gap, but the influence of behavioural differences too. Employers should consider these long-term impacts when structuring their pension saving plans and employee communications, so that all employees are best enabled to make the best decisions for their circumstances. Plus, impactful benefit design choices, like the treatment of salary sacrifice pension contributions during maternity leave, can shine a light on a company’s commitment to closing the gender pension gap.
From an employee perspective, Associate Consultant Anna Hayward understands how International Women’s Day has inspired companies to develop their benefits packages and policies. She states that “a varied benefits package and flexible working arrangements now provide a comprehensive, family-friendly policy. This has helped me to progress in my career aspirations while raising a family.”
As we recognise International Women’s Day this year, companies have an opportunity to assess how they are investing in women in their workplaces, and where improvements can be made. They can identify where amended policies and communications can provide more gender parity in their workforce’s wellbeing, engagement with key benefits, and pension outcomes.
[1] https://www.internationalwomensday.com/
[2] https://www.unwomen.org/en/get-involved/international-womens-day#:~:text=This%20International%20Women’s%20Day%2C%208,escalating%20impacts%20of%20climate%20change
[3] https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/genderpaygapintheuk/2023#:~:text=Image%20.csv%20.xls-,The%20gender%20pay%20gap%20has%20been%20declining%20slowly%20over%20time,up%20from%207.6%25%20in%202022.
[4] https://adviser.scottishwidows.co.uk/assets/literature/docs/61096.pdf
[5] https://www.cii.co.uk/media/9224351/iwf_momentsthatmatter_full.pdf
[6] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-matters-even-more-the-case-for-holistic-impact
[7] https://www.forbes.com/uk/advisor/life-insurance/life-insurance-for-women/
[8] https://reba.global/resource/3-reasons-why-group-income-protection-is-particularly-valuable-for-women-benefits-insurance.html