Cash advice

With women facing a gender pay gap and a smaller pension pot in retirement, we look at the simple steps you can take to improve your finances…

1 THE BASICS Few would argue that women face more of an uphill struggle when it comes to achieving financial freedom than men. Not only is there still a gender pay gap but a £100,000 pensions gap to contend with too. Research from Scottish Widows showed that young women face 37 years longer at work to close the gender pensions gap. Research from Charles Stanley Direct also shows that 85 per cent more women than men haven’t tried investing, so their money isn’t growing there either. We may be some years away from closing these gaps, but the good news is there is something we can do to help close them.

2 THE GENDER PENSIONS GAP With women predominantly in lower paid jobs and the ones who take career breaks, it’s no surprise their pension pot is lower than that of men, and the pandemic only made it worse. But according to Scottish Widows, upping your pension contributions by 5 per cent could close this gap. If you are employed, over age 22 and earn at least £10,000, you’ll be auto-enrolled into a pension fund and benefit from employer contributions, too. If you’re self-employed, start saving into a private pension as soon as possible. Go to moneyadviceservice.org.uk to find out more.

3 MAKE YOUR MONEY GROW Research shows that when women invest, they do better than men, yet fewer women actually do it. By not investing, women are missing out on the opportunity to make their money grow, but make sure you do your research before you invest.

4 ASK FOR A PAY RISE The Equal Pay Act of 1970 made it illegal to pay men and women differently for the same work, yet we still have a 15.5 per cent gender pay gap according to the latest figures from the Office for National Statistics. According to research, women are less likely to ask for a pay rise, with 79 per cent saying they don’t have the confidence, according to Fidelity International. If you think you’re underpaid or you’ve missed out on a pay rise opportunity because of childcare or a career break, then make your case. Do your research, and then pick a time to talk to your boss.

5 GOLDEN RULES OF INVESTING ‘Investing is one of the most important ways to grow your wealth,’ Rob Morgan, investment analyst at Charles Stanley Direct says. For those who’ve saved some money in a cash account, transferring some to an investment could make a significant difference. You can start with your £20,000 tax-free ISA allowance, which can be used to invest in stocks and shares.