The gender pay gap may have come under widespread scrutiny in recent years but other aspects of glaring gender inequality in the financial realm are also now being explored. From the gender pension gap to stark differences in financial literacy, historical imbalances in income have served to propagate a financial health gender gap that in some cases is a gaping chasm.
According to the European Institute of Gender Equality, on average in the EU, women in relationships earn one third less than their partner’s earnings. Meanwhile, research from the Stanford Center on Longevity reveals that women tend to score lower than men when it comes to financial literacy.
Gillian Harford, country executive of the 30% Club (Ireland), says the gender pension gap is very real and probably isn’t highlighted enough.
“Women live longer than men and thus have a greater need for a pension,” she notes. “If they are starting off with a much smaller pension it really is a worry in terms of continued financial independence.”
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Leonardo Mazza, head of cross asset strategy and fund manager with Cantor Fitzgerald Ireland, says that although the gender pay gap has dominated the headlines, attention is now turning to the gender pension gap.
“Research indicates that women may have to work up to eight years longer than men to achieve the same retirement savings,” he says. “This is an inequity that calls for urgent action, addressing not only income disparities but a wider financial inequality that places women at a disadvantage.”
Women often report feeling less confident than men when it comes to managing their finances, says AIB’s head of wealth and general insurance Ciara Ryan.
“This continues to be the case, despite the fact that Irish women are having a growing influence on the economy, with rising levels of female entrepreneurship and greater representation at senior levels of businesses across Ireland,” she adds.
AIB has done some research on the gender pension gap, putting it at a staggering 31 per cent. “To put it in real terms, this means that the average total income in retirement is €299 per week for women vs €433 for men,” says Ryan.
The gender pension gap results from what Harford calls a “triple bind” – a combination of historical factors.
“The first contributing factor is that women tend to be in lower-paid jobs,” she explains. “Obviously this means less pension value for the future.” The second reason is that women have periods out of employment that aren’t covered for pension purposes – Harford says this might be part-time work or a career break. “Even maternity leave doesn’t count as pensionable service.”
The third factor is that women are less likely to make additional voluntary contributions to boost their pension value. “Women are more likely to divert their extra cash to the house or the family; they don’t consider investing in themselves,” Harford says.
Getting women into higher-paid jobs is an obvious solution. “It is about gender representation and progress and opportunity and ensuring that women clock up more pensionable service,” Harford says. “There needs to be a mechanism where women can catch up on pensionable service. Some enlightened organisations are already seeking to ensure that their female employees are not disadvantaged in terms of pensionable service if they take any kind of family leave or career break by allowing them the opportunity to make up that service.”
She also notes that companies focused on actioning their gender pay gap are contributing to reducing the gender pension gap too as those are so closely connected.
Beyond the pension gap, Mazza says there are acute gender disparities in risk attitudes, financial literacy, and confidence. For example, women tend to be more risk-averse than men.
“The desire for stability among women usually results in more consistent and predictable financial outcomes,” he explains. “However, this conservative strategy can also limit long-term financial growth. Investments that carry higher risks, such as stocks, often yield higher returns over time.”
Risk aversion is influenced by many factors, including confidence, financial knowledge and societal expectations, he adds. “Women may feel less confident in their ability to assess and manage financial risks, even when they have similar levels of knowledge as men. This hesitancy can lead to overly cautious financial behaviours that prioritise security over growth.”
Interestingly, studies have also revealed that men tend to overestimate their knowledge about finance, whereas women tend to underestimate their knowledge of the subject – even when actual knowledge levels are similar.
And while women and men handle debt similarly in many cases, Mazza says women are more likely to prioritise saving cash rather than paying down debt.
“For example, a woman who keeps a larger emergency fund may carry credit card debt longer, incurring higher interest over time. This conservative approach to debt can result in heavier financial burdens in the long run.”
Irish women, however, are forecast to hold 45 per cent of assets under management by 2030.
“It is important from a gender equality perspective that women are empowered to control their finances to ensure financial independence and wellbeing for themselves and their families in the long run,” Ryan says. Knowledge is power, she adds. “A financial review can help to identify ways to improve your financial health by protecting your family, covering your income or making sure you’re ready for life after work.”
Both Mazza and Ryan say robust financial advice and planning is the key to addressing these barriers, Mazza says. “Education is key – learning about diversification, market trends and tailored strategies can reduce fear and uncertainty. By fostering a partnership approach, advisers create a space where clients can confidently ask questions, express concerns, and participate actively in shaping their financial futures.”
