Men usually retire on 35% of their final salary compared to women who retire with between 9% and 26%, according to Alexforbes Member Insights 2021.
Belinda Sullivan, head of corporate consulting strategy at Alexforbes, says the gender pension gap extends from the income gap and employment patterns – and resulting pensions are related.
Furthermore, women typically live longer than men and spend more years in retirement.
According to Stats SA 2021 data, women are expected to live to 64.6 years compared with 59.3 years for men. This means that women need a higher level of savings than men to achieve the same annual income in their retirement years.
Women could also spend more time being alone during their retirement years as they generally outlive their partners.
Financial wellness between men and women has significant differences as a result of the pay gap. The Global Gender Gap Report 2022 ranked South Africa 123rd out of 146 countries for wage equity for similar work.
According to UASA, South Africa had a stagnant median gender pay gap of between 23% and 35% even though there is legislation to prevent gender discrimination in the workplace.
The Covid-19 pandemic pushed the projected time to close the pay gap from 99.5 years to 135.6 years.
The pay gap affects the ability of women to save and get financing and credit. Other factors in society also affect a woman’s ability to save, for example, taking career breaks to care for their family, working jobs that offer flexibility such as freelancing, and saving smaller amounts each month due to their lower incomes.
According to Alexforbes, to be prepared for retirement women need to:
– Recognise the unique financial challenges they face as a woman and manage them with support and guidance
– Start saving from as earlier as possible
– Balance needs and debt
– Know their options if they choose to stop working
– Look at different investments for their specific needs
– Be active in making financial decisions
“Education and advice help you to be financially savvy with higher levels of financial courage to improve your finances. Reach out, get advice from a financial adviser and empower your future self,” Sullivan says.
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