As new regulations in the UK tackle the gender pay gap, enduring pay inequality between men and women is one of the reasons so many women in South Africa are not able to retire comfortably.
New regulations in the UK require that all companies with more than 250 employees report their gender pay gap to the Government Equalities Office by April this year. This shift towards greater transparency will likely put pressure on companies to pay their female and male staff more comparable wages.
The problem is far from unique to the UK, however, and South African women face similar, if not worse, struggles. The 2017 Pulse of the People report run by market research firm Ipsos found that, on average, women in South Africa earned 27% less than their male counterparts. The same report, which surveyed more than 3 500 employed South Africans across various occupations and regions, found that this gap becomes even wider when looking at top earners, where South African men are earning as much as 39% more than women at a similar level.
Recent survey findings revealed that 32% of female South Africans feel vague and unsure about their retirement plan; men were almost 10% more clear on their long-term investment and savings plan. The correlation between the gender pay gap and poor retirement outcomes for women is complex, with key empowerment issues such as these being mutually reinforcing.
The wage gap may go some way to explaining why so many South African women are not prepared for retirement when the time comes around. The two are part of a vicious cycle of sorts.
Providing for retirement, frequently left to male partners in a relationship, is a classic empowerment issue. Not being dependent on someone else for financial planning is very liberating. The same goes for knowing your future is taken care of.
No one cares more about gender equality than women.
As everyone knows, rights and responsibilities go hand in hand. Preparing for retirement is everyone’s responsibility. Getting involved in the family’s long-term financial planning is often a key step in a woman taking charge of her life. Women must believe in their ability and the value they can add at all levels of life.
Women naturally take charge of many key, complex family decisions, such as the household budget, what the family eats, and where the children go to school. There is no doubt that women are more than capable of understanding how to save for retirement.
Besides, retirement planning is not that complicated. Investing 15% of your salary for 40 years in a high equity fund and paying less than 1,5% of it away in fees will ensure a decent retirement. Our advice to women is to take control of key areas of your life, such as planning for retirement.
There is no better moment than now to start planning for then. Don’t believe anyone who tells you your life and future is too complicated for you to manage: Retirement planning is largely about sticking to a simple plan and making sure you get the best value for your money/savings over the long-term.
Until next time, take care.