Many women still suffer from a touch of the Cinderella complex. These days, few want men to sweep up the bills as well as sweeping them off their feet. But many women implicitly expect to rely on their men’s private pensions in retirement. 'My husband is good with money. I leave that stuff up to him', said the young woman at my hairdressers. I just managed to stop myself from giving her the full two barrels and screaming: 'No! Don’t put your future into someone else’s hands!'
Despite women achieving equality in so many other ways, that is what more women are doing, according to the latest Scottish Widows’ Women and Retirement Report. Only 52 per cent, compared with 60 per cent of men, are saving enough to feel comfortable in retirement - which is lasting longer as life expectancy rises. In 2014, the gap was five per cent.
Much of the difference stems from women earning lower average wages and often working part-time or taking career breaks to look after family. Many pay childcare costs solely from their income instead of expecting their partner to chip in, so they have less to save. It is as if they feel guilty for working and creating the need for childcare. Yikes, as if they don’t already do more than their fair share. Some also lag in personal savings because they put others first. They feel it is selfish to pour money into their pension pots when there is food to be put on the table and trainers to buy. And some, maybe through fear, take the easy way out and leave long-term finance to hubby.
The gender pensions gap is also widening because more women are becoming self-employed, often as a way of juggling domestic responsibilities. If they manage to make more than they need to live, the temptation, as always for the self-employed, is to invest all profits into growing the business. Nearly 1.5 million women in the UK are self-employed – a 22 per cent jump in four years and twice the rate of self-employed men. The trend looks like continuing. But Scottish Widows reckons only 36 per cent of self-employed women against 47 per cent of self-employed men save enough. Divorced women also find it harder than their ex-husbands to make pension contributions. And four in ten marriages end in divorce, with the rate rising among the over 50s, the so-called silver splitters.
We have come a long way since the days when many women were economic dependents. I have heard older women tell how they had to ask their husband for lipstick money. One woman told me she regularly took small change from her husband’s trousers to build a 'leaving him' fund. But we have further to go to reach retirement equality.
Closing the pay gap would help, although that would be too long coming, and would not be enough to drive change. Even high-earning women save less than their male counterparts. Women who have fought hard for independence in other areas of their lives are risking dependency in their later years. The dice are loaded against women, so they should make saving a higher priority and start earlier. Persuading people to make pension contributions is hard anyway. The rewards are seen as being too far off, so payments are regarded as little better than bills.
People, women especially, have to be convinced that pension savings are worthwhile everyday expenses. A decent private pension makes the difference between surviving on a vastly reduced income, or enjoying the huge chunk of life most of us have after work. The government, employers, unions, and pension providers must do more to publicise women’s vulnerability. And they should lay out options in plain English. Most literature is so technical and intimidating that readers - of both sexes - often shut down. Some rule changes would help. Currently, many women fail to qualify for automatic pension enrolment at work since they earn under the annual £10,000 that triggers it. Even those doing two jobs, and twice as many women as men do, may not qualify if neither job triggers contributions.
But most of all we need a change in attitude. As Winston Churchill said 'attitude is a little thing that makes a big difference'. Girls and boys need to be taught about money so they have the confidence to ask questions and demand answers they can understand. Couples should get a dialogue going from early on. The sooner a private pension starts, the more years it has to grow. And where one partner chooses to stop working to care for family, the other partner should be encouraged to contribute to the non-working partner’s savings.
So what did I say to the naive woman in the hairdressers? Forcing myself to adopt a casual tone, I asked her what would happen if her husband became sick and couldn’t work or, God forbid, died. Becoming braver, I said that, while I was sure her marriage would be fine, some men leave their wives. I decided against mentioning that one day she might want to leave him. I did, however, say that maybe her Prince Charming might find it a burden to shoulder all the responsibility of financial planning, and that not all princes were as good at money as they are at putting slippers on their feet.
We now teach our daughters that they can become anything they want. In our bedtime stories Cinderella can become an engineer and marry her Prince. Cinders should also have a great retirement fund so she can buy her own fancy frocks and take herself to as many balls as she wants.