Women live about five years longer than men but still only earn about 80% of what men do for equivalent work.
And even though this means they have to work harder and longer if they want to retire as comfortably as their male counterparts, the challenges keep coming.
Men are more likely to be employed than women – with almost 50% of all working-age women in South Africa out of work, versus 26% of men; women are more likely to work part-time, thus earning less than full-time employees; and women are still responsible for more care activities in their non-working time, compared to men.
These are just some of the factors behind the global pension gender gap, as described in Sanlam’s 2022 Women’s Report. Farzana Botha, segment manager at Sanlam Risk and Savings, outlines a few more:
- South Africa’s pay parity score is dismal, ranking 111th out of 146 countries
- Globally, women who take a year off for care-giving earn 39% less than those who do not. Fathers' rate of workforce participation is 21.1% higher than mothers’. Lack of affordable childcare is hugely restrictive for women the world over; it inevitably impacts what women can afford to contribute toward retirement
- Women often have lower levels of financial literacy, impacting their decision-making
- 51% of men have their employers contributing to their pension funds, versus 46% of women
- Education does not always help. In fact, the pay gap between men and women increases with more education. Globally, women with a bachelor’s degree earn 74 cents for every dollar their male counterparts (in education) receive
- 42% of houses in South Africa are female-headed, and about 60% of homes have absent fathers
Given all these factors, women globally tend to contribute 30% less to their retirement savings. Citing more data from the recent Sanlam survey, Botha notes that 48% of women say they are probably not saving enough towards their retirement to make their goals a reality. In fact, 26% state they cannot afford to stop working and will have to work for as long as they can.
South Africa’s gender pension gap sits at 26%, reflecting the average difference in retirement income between men and women, so women cannot afford to retire as early, or as comfortably, as men. Turning this around should be a national imperative.
“Closing the gender pension gap is a multifaceted, immensely complicated task that requires sustained, creative engagement from myriad stakeholders. It also requires targeted financial literacy interventions for women, from a young age.”
She says a multitude of factors contribute to the gender pension gap, including the fact that women typically live about five years longer than men, but earn 82% of what their male peers make, for equivalent work. Closing this pay gap will take close to 300 years.
“Women must be empowered to control what they can. This includes stretching their retirement incomes for longer and preparing for higher healthcare costs. Longevity literacy is key to this.”
The gender pension gap, Botha says, has “devastating consequences” for everyone – it’s not just a burden for women.
“It impedes economic growth and inevitably impacts state resources. The World Economic Forum (WEF) phrases it succinctly: so long as the gender wage gap exists, there’ll be a gender pension gap. So long as women are doing the lion’s share of care work that’s chronically un- or under-paid, there’ll be a pension gap.”
Retirement, she says, needs to be re-framed to be more personal, and less rigid and conventional, as the wind-down years offer “incredible opportunities” to pursue new careers, travel and take on passion projects, spend time with loved ones, and impact one’s community in a lasting way. In fact, 33% of women view retirement as an opportunity to start a second, gentler career.
“That’s what we need to empower women to focus on. Then it’s about building real road maps to achieve the requisite financial freedom to reach these goals.”
Botha adds: “Longevity literacy plays a crucial role. We need to enable women to make positive choices early on, to put the building blocks in place for a long, fulfilling life. Part of this is making regular retirement contributions, however small these may be. It’s also critical women have healthcare protection in place.”
Financial advisers can play a pivotal role in helping women choose appropriate retirement plans, for example, and outlining the benefits of a life annuity.
“The earlier we can help women to invest in their financial future, the better for them, and for our nation.”
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