Sue LewisConsultant

Chair, UK Financial Services Consumer Panel

High-level Global Symposium on Financial Education26-27 February 2014, Seoul, Korea

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Long-term Savings and Investments:

Supporting Women’s Choices

Women are less likely to hold financial products

Lower levels of financial knowledge than men, even after allowing for socioeconomic factors

They are also: Less confident about their financial knowledge

than men Less interested in financial matters Less likely to compare financial products or

gather information from independent sources

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Financial literacy: some gender differences

Shorter financial time horizon More likely to keep a close eye on day-

to-day spending More likely to save for short-term goals Less likely to make long-term financial

plans Save smaller amounts Save informally Risk-averse

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Women and saving

Reduced participation in the economy Imbalance of economic power within

households Less ability to pass on financial ‘know how’ to

children More vulnerable to sudden shocks – eg

divorce Lower levels of asset accumulation Vulnerable to poverty in retirement

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Consequences of gender differences

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Programmes aimed at women: policy goals

Policy goals

Developing entrepreneurship skills

Increasing financial inclusion, use of formal savings

Developing product-choosing skills

Supporting planning for retirement

Avoiding problem debt

Men Women

Occupational pension

44% 35%

Personal pension 18% 10%

Stock and shares 18% 10%

Stocks and shares ISA

17% 11%

Women and Pensions Report. Scottish Widows. October 2013 6

Women and long term savings: a snapshot from the UK

Gender pay gap – 25% + smaller bonuses Fragmented work patterns More ‘rainy day’ savings, spend more on

children Complexity and confusion:

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Why the differences?

Men Women

Not saving because don’t understand pensions

7% 15%

Don’t know what an annuity is 47% 59%

Don’t know what type of private pension they hold

13% 24%

Unsure of employer contribution 38% 51%

76% worried about adequate standard of living in retirement

Over half made no changes to retirement plans 71% not confident making retirement savings

decisions Half did not know where to go for information 74% did not know how much state pension they

would get; 36% did not know when it would be paid 57% didn’t know if they have made enough NI

contributions 38% did not know what their private pension would

pay, or where to get information about it

Pensions Advisory Service, January 2014 8

Women and pensions survey

General: Compulsory financial education in schools

Need to ensure girls are engaged Pensions autoenrolment

Problem of ‘small pots’, choosing an annuity

Gender specific: Money Advice Service – Parents’ Guide to

Money The Pensions Advisory Service – Pensions

Guide for Women, dedicated helpline

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Policy responses

Start early – ideally in school Integrate with other approaches

to empowerment Learning environment – mutually

supportive Minimise use of jargon Role models – ‘people like me’

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Women and financial education, some principles and good practice

Hung, A., J. Yoong and E. Brown (2012), "Empowering Women Through Financial Awareness and Education", OECD Working Papers on Finance, Insurance and Private Pensions, No. 14, OECD Publishing.Women and Financial Education, Evidence, Policy Responses and Guidance. OECD (2013).Lewis, S. and F. Messy (2012), "Financial Education, Savings and Investments: An Overview", OECD Working Papers on Finance, Insurance and Private Pensions, No. 22, OECD Publishing.Available: www.financial-education.org

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References