The Truth Behind the Gender Pay Gap and How To Protect Yourself
There are several days in the calendar year designed to bring awareness to the ongoing struggle for equal pay. And let’s be honest, they don’t make much of a difference. For example, Monday 18th September was the UN Equal Pay Day.
Did you know about it? See anything on social media, or even know the day existed?
Probably not.
Because here’s the thing. Every country has its struggles with this topic - even the socially developed ones like Iceland and Finland. Unfortunately, the reality is, for the gender pay gap to disappear a lot needs to happen culturally, socially and economically.
And quite frankly, I don’t see that happening anytime soon.
So what’s the point?
According to the Trade Union Congress the pay gap in the UK sits at an icky 14.9%, which equates to about two months of free work each year. The study then goes on to highlight the variations between age, region and industry.
Now, I can bore you with all the statistics and quote study after study but I know you’re here for actionable tips. Because as a City Girl you know the value of financial education.
We make ourselves, brothers, sisters, nephews, nieces and partners aware of the statistics and situation, and we take the actionable steps to protect ourselves because the change needs to come from somewhere.
It starts with education. And, as we’ll focus on in this article, safeguarding our financial future (pensions) and growing the confidence to get what we deserve.
We are dedicated to supporting and empowering City Girls to take full control of their financial health. Photography by Tamara Breeze
The Two Main Factors Affecting Equal Pay
From all my research and years of talking about money with other women, it has become clear that the two main reasons we fall behind in finances are:
Taking time to raise the next generation, lowering the priority to prepare for our financial futures
Not believing we are worth it
So let’s dive into the first point first (because you know, logic).
Not everyone reading this article is destined for motherhood. And that is your decision and no one here is going to judge you. But, being aware of the following is still good information to know.
A study by pension provider Scottish Widows found that only 43% of women are fully prepared for retirement and another found that the average pension pot is less than half of a man’s at a mere £24,900.
Scary, I know.
To help clarify some points, I spoke to Cheshire-based financial advisor, Emmelia Powell.
She believes that a reason for this is that when women take time off to care for their children, they don’t always consider the full financial implications, especially ones regarding the future.
When you don’t work you lose your employee benefits and miss pension and National Insurance contributions.
In addition, non-taxpayers can only contribute £2,880 net per year into a pension and receive tax relief.
For those wondering, yes, you should have your state pension (NI contributions) and a secondary pension, either through your employer or a SIPP, if you are self-employed.
But that’s a discussion for another day.
The majority of City Girls that we have spoken to feel they have no control over their pension. Photography by Phoebe Wrapson
So What Should You Do?
According to Emmelia, there is quite a lot we can be doing, whether we’re planning for maternity or not.
As a general rule:
Track down any lost pensions. This is something all of us can do, especially if we have changed employers. Pension Bee is a great company to use for help with this.
Start a pension if you don’t have one already. There are loads of pension options - some scarier than others, but all with good intentions. Especially the ones with tax advantages like Lifetime ISAs.
Check if you are eligible for any benefits and claim them. This can help reduce your monthly outgoings and leave more for a savings or pension pot.
Be aware of your finances and make a plan for the future. Easier said than done in the current climate, but knowing exactly where you financially stand is a great place to be.
For those expecting or with children already:
Check if you are eligible for NI contributions through child benefits as this will help build your state pension pot.
Talk to your partner. Having regular conversations about money, income, spending and your concerns is essential.
During your maternity leave, consider paying as much as you can into your pension pots. For this one, you will need to speak to a professional so they can advise you about tax reliefs and best practices.
Admittedly, some of these steps sound scary and will require a conversation with a financial advisor or your partner.
But ask yourself this “What’s worse, one or two hours of awkward conversation or spending your retirement worrying about affording food and the heating bill?”
We create safe spaces across our cities to have vital conversations about money. Photography by Tamara Breeze
Knowing We’re Worth It
OK, so onto the second point.
Men have a level of audacity women never will. It’s just how society raised them.
For example, as this article shows men will apply for roles they are only 60% qualified for, while women tend to only apply if they meet 100% of the requirements.
They are also more likely to negotiate salaries and employment packages AND put themselves forward for promotions.
In the world of the self-employed, men charge way more than their female equals.
For the record, this is not something we should be scolding them for. This is one thing we need to learn from them.
Imposter syndrome is good for no one and it is something we as an entire gender need to work on.
So what are the actionable steps here?
1. If you believe you deserve more money, ask for it. Book a meeting with whoever you need to and make your case. There are several websites that offer tips on how to negotiate your salary. There are also female-dominated communities like this one that love supporting and offering advice.
2. Work on your confidence. If you know you deserve a better employee package and/or a raise but really struggle with social anxiety, take the steps to overcome it. Start by attending small or virtual events (we have loads of events across the country) and make it a goal to approach someone each time. As your confidence grows, attend bigger events, speak to more people, put yourself out there more. When you feel less anxious, book that meeting with your manager and ask for what you deserve.
3. Know your industry. If you are a freelancer, network and ask questions about rates, fees and industry norms. If you discover you’re undercharging, change your rates immediately.
We design our events to empower confidence and enable knowledge sharing. Photography by Phoebe Wrapson
Concluding Thoughts
Women are programmed to not take up space and are taught that money is a no-go subject.
But that thinking is no longer acceptable in this community.
From now on we are asking questions and taking the necessary steps.
So to summarise:
Have awkward conversations with friends, partners, colleagues and peers
Speak to a financial advisor about your options
Plan for the future
I know some of the actionable steps are scary, but they are necessary.
Money isn’t everything but it does give us options, protection and access to resources.
This is one of the first articles I’ll be writing regarding financial education. I’d love to know your thoughts, feelings and questions about finances and money so please leave a comment below and let’s start safeguarding our future.
By Hayley Ashworth
Disclaimer: The information in this article is not a substitute for professional financial services.
Could you or your company support City Girls with any of the points mentioned in this article? We’re looking to highlight more fantastic, ethical companies in our Business Directory. Email hello@citygirlnetwork.com for more information.