South Africa ranked 20th out of 146 countries and 92nd for economic participation and opportunities according to the Global Gender Gap Report 2022.
Both men and women have the same needs and challenges in planning for their future:
- Getting credit or financing for business
- Managing debt
- Needing long-term care
- Outliving their money
- Not saving or investing well enough
Unequal pay for similar work – even in retirement
South Africa ranked 123rd out of 146 countries in the Global Gender Gap Report 2022 for wage equity for similar work. Income during retirement is even more unequal. Men usually retire on 35% of their final salary (compared to 9% to 26% for women) according to Alexforbes Member Insights 2021.
The gender pension gap extends the gender income gap
Employment patterns and resulting pensions are related. Women would typically live longer than men and spend more years in retirement. Consequently, they need a higher level of savings than men to achieve the same yearly income throughout their retirement years.
Women could expect to live to 64.6 years compared to 59.3 years for men according to Stats SA 2021 data, even though Covid-19 reduced life expectancy during 2021. Women could spend more time living alone during your retirement years as they generally outlive their partners.
Unfortunately, financial wellness between men and women differs significantly as a result of the pay gap. This affects a woman’s ability to save and get financing and credit.
Various factors in society affect a woman’s ability to save:
- Taking career breaks to care for their family
On average, women will be employed for fewer years than men. They are more likely to take a career gap to start a family or care for ageing parents, resulting in lower savings. Often, they might also cash in your savings to support the loss of income. This not only reduces the long-term compounding of savings, but depletes any money already saved.
- Working in more flexible jobs such as freelancing
There may be very little or no benefits available to women while freelancing. So they need to know how to plan for their future and what options are available.
- Saving smaller amounts each month
Women would typically earn less than men, as is evident in the Global Gender Gap Report 2022. Therefore they will save less and receive less of a matching retirement contribution from their employer.
According to Alexforbes women need to:
- Recognise that they have unique financial challenges and use support and guidance to manage these
- Start saving as early and for as long as possible
- Balance needs and debt over short and long periods
- Understand options available if they stop work for a while and how to keep money invested for their future
- Consider different investments for specific needs
- Be active in making financial decisions
Education and advice help women to be financially savvy with higher levels of financial courage to improve their finances. Reach out, get advice and empower your future self.
Belinda Sullivan, head of corporate consulting strategy at Alexforbes.