• Longer life expectancy means the average cost for women entering a care home from 65 –74 is £132,000, nearly double the cost of men's
  • The average man accumulates five times the pension pot of the average woman
  • Women now earn the same as men their 20s but men overtake them at age 30, – women’s pivotal caring role in society leaves them less able to save for their own future
  • Separation and divorce present key risks for women

Life is a risky business for men and for women, but the risks they face are not the same. Women have less financial resilience to bounce back from financial shocks and are more likely to be trapped in poverty in later life, according to a new report out today by Insuring Women’s Futures (IWF). IWF is a programme established by the Chartered Insurance Institute (CII) to support the insurance profession’s role in relation to women and risk.

The average woman is outperforming the average man in education and now earns as much as men in her twenties. However a significant pay gap opens from her early thirties, and by her fifties, she typically earns 16% less than a man of the same age and is more likely to be in insecure employment.  Her 30s are typically spent caring for children, alongside part-time or temporary work, and in her 40s and 50s she may also be caring for an adult.  The pay gap coupled with loss of earnings through unpaid care, has a huge impact on her ability to save and bounce back from hardship or plan for her financial future.  And we have yet to consider relationship breakdown, a risk in her late 30s, 40s and 50s in particular, which has profound effects on her future wellbeing.

This lack of saving ability can be clearly seen when it comes to pensions. The average man accumulates five times the pension pot of the average woman by the age of 69, with a man having £179,091 and a woman of the same age having just £35,800. For divorced women the situation is considerably more precarious, with average pension pots worth a mere £9,019 compared with £30,341 for divorced men. Many decisions around retirement saving are made as a household, and women in long-term relationships may expect to share their partners’ pension wealth. But the research shows these patterns of pension wealth leave women vulnerable in the event of a relationship breakdown and mean that women are more likely to rely on a partner or the state for their income in old age (48% of divorced women compared to 38% divorced men).

Life expectancy is increasing and a girl born today can now expect to live until 83 and a boy can expect to live until he is 79. But women typically have more years in ill-health at the end of their lives (19 years on average, compared to 16 years for men), and need professional care for twice as long as their male counterparts. The average cost of women entering a care home from 65 to 74 is £132,000 - nearly double the cost of men’s.

Insuring Women’s Futures has produced this report to highlight the gap between men's and women’s exposure to risk and resilience to shocks. It is setting up an industry task force to address this issue bringing together the insurance profession and other sectors and bodies, including the Government, to consider solutions to tackle this.

Sian Fisher, CEO of the CII and Chair of the IWF committee, comments on the research: “Women today are left disproportionately exposed to risks that society is not overtly recognising. This is at the same time as historic support systems are receding. We are moving from a dependence culture to one of independence, where we will have to be less reliant on our partners, families, communities and the state, and must take charge of our own financial welfare. Yet today’s women are simply unprepared for the risks that they will face in life.

“This is not just a ‘women’s issue’, it is a wider risk for society because if we don’t address it now, we will face a huge burden of care that we will not be able to sustain.”

Jane Portas, IWF Committee lead on Women's Risks in Life and PwC Partner said: “This study presents a snapshot of the risks faced by women and girls in Britain today. It shows us that while women are increasingly better educated, they earn less, feel less financially secure, provide the bulk of unpaid care, have smaller pensions, and face greater hardship in life and struggle to pay for their own care.  But it’s not just about women and girls, the study shines a spotlight on wider society and men’s and boys’ risk exposure too. 

“I encourage men and women, both in the insurance and financial planning profession, other bodies, and society at large, to study these findings and play a role in shaping our approach to risk in the future.”

Baroness Ros Altmann, former Pensions Minister said: “As consumers we all have a lot of risks to worry about.  It's easy to become disengaged; simply from feeling there are too many competing risks. Should I worry about paying into a pension, getting a mortgage or paying off my debts? Studies like this help to clarify those priorities, helping us all to decide how we can take charge and engage in managing our personal and family risk.”  

The CII is setting up an industry task force to consider solutions aimed at empowering women to protect themselves against the risks they face in life.

The report was launched at the Chartered Insurance Institute in London on Tuesday
13 December 2016 to senior executives from across the insurance profession. The event was hosted by the Chartered Insurance Institute, as part of the Insuring Women’s Futures programme. The report can be downloaded at: http://www.cii.co.uk/consumer/womens-risks-in-life/