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; and
- Not saving or investing well enough.
Unequal pay for similar work – even in retirement
“You deserve equal pay for equal work that you do,” President Cyril Ramaphosa said during a reception for football team Banyana Banyana in Tshwane. “I have been told that you get 10 times less than what the men get when they play, and that has to come to an end.”
South Africa was 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 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.
Unfortunately, financial wellness between men and women differs significantly as a result of the pay gap. This affects women’s ability to save as much as they need and get financing and credit.
Various factors in society affect women’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 their 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 they have.
- Saving smaller amounts each month. Women would typically earn less than men, therefore they will save less and receive less of a matching retirement contribution from their employer. They also often manage the household and food bills.
Women need to:
- Recognise that they have unique financial challenges as a woman 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;
- Consider different investments for specific needs; and
- 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.
• Sullivan is head of corporate consulting strategy at Alexforbes
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