No more ostriches – the elephant in the room has to be dealt with. Time really has come to take the bull by the horns!

Back in 2016 The Chartered Insurance Institute (CII) looked to do this by developing their Insuring Women’s Futures (IWF) programme aimed at promoting and enhancing the insurance and financial planning profession’s role in relation to Women and Risk. They continued this work publishing an interim report, Risks in Life, which considered the unique risks faced by women and their exposure and resilience to these, and how these differ from men’s.

This report formed part of their programme of insight, to drive positive action in support of society’s experience of risk. However, it is the publication of their 2nd report “Securing the financial future of the next generation” that explores the issues much further and which sees the setting up a task force to start to look to address the critical issues the report exposes as well as calling on the government and industry to take notice and to work together to resolve ‘the elephant in the room’.

As your average 50 something year-old female with 2 daughters and ageing parents, this report hit so many home truths and not just because of my gender. Although the focus of the report is unashamedly female for reasons that become obvious as you read the report, the significance of the findings extends beyond gender and it is a real wake up call to society that we really have to take action – immediately – if we are to begin the reverse what is currently looking increasingly like a bleak future for our children and our children’s children.

The fact that there is an under-representation of women in positions of seniority in almost all areas of business is nothing we’ve not heard before. However this report is not about banging that particular drum (this still needs to be beaten though!); it takes a totally different look about how and why the decisions young girls make – or rather in some cases the limited choices they have  – can have consequences that they are most likely never to have contemplated.

Looking at life through the various stages, the report explores through analysis of data, the implications of decisions taken at what are described as “Moments That Matter” in something of “sliding doors” manner. Unsurprisingly there are 6 Moments:

Within each Moment, the report has identified that there are a number of events and personal experiences that will shape our decisions and, as a consequence of these, we will be exposed to what the report has termed “12 perils and pitfalls”. Subject to where we are on our own life journey, we will be exposed to one or several risks at the same time and indeed our decisions could unwittingly lead us to be exposed to further risks. We can’t avoid risks but I wonder how often we appreciate, consider or even understand the consequences.

I didn’t go to University (I didn’t get the grade for my first choice course and in a fit of pique, chose not to go and went to college instead to do a stereotypical female course to become a secretary instead!). But with the report revealing that student debt was £32,300 in 2017 compared with £11,800 in 2010, the decision to go perhaps needs more consideration than in my time which was more around which university offered the best social scene!

It is not the amount of potential student debt that the research is highlighting but rather raising the issue of the dilemma of whether girls understand or even consider what the rewards of accumulating such a debt are and if they are indeed worth it. And if you decide not to go on to further education, what does that future look like for young girls. It was disappointing to read that despite out performing men at both GSCE and degree levels, that women go on to earn less by virtue of the roles and industries they go into. This is described as the ‘Young girls graduation burden’ and the ‘Girls graduation gap’. With a prediction that 2 of 3 current jobs likely to become automated in future and 55% of secretarial and administrative jobs at high risk of being made redundant, 75% of which are done by women, it is a real concern. On a positive note though, 85% of jobs that will exist in 2030 have yet to be invented!

Turning to family life, I was not surprised by the effect of separation and divorce for women but I was startled by the revelation that 71% of divorced people did not discuss their pension during divorce proceedings, missing out on £5bn each year. The consequences of such a decision are evident as the report goes on to show. People who choose to cohabit rather than marry don’t escape either as the report shows there is also a Cohabitation pitfall affecting women’s ability to build and accumulate pension wealth.

As everyone is aware, motherhood and working part-time have a damaging affect on women in respect of a ‘motherhood and caring penalty’ and the ‘flexible working sacrifice’ but seeing the facts and figures does put this into stark perspective – 55% working adult women with no children have no pension wealth, increasing to 56% 72% and 85%  for 2, 3 and 4 children compared with 56%, 49%61% and 69% for men. Surely as a society we should not just be accepting this as the norm but rather asking what we are going to – or rather what we are prepared to accept we need to do – to change this.

With everyone living longer and likely to require care that the government will be unable to afford to fund, and with fewer younger people likely to ever get to own their own property, it is very much the elephant in the room, like the funding of the NHS, that as a country we are going to have to address. Unfortunately, the report shows that women are likely to live longer so will require significant finances to be able to afford such care.

The report eloquently lays bare the serious issues that women, businesses – in fact society generally – face. It recognises that there is not going to be a simple, quick fix and acknowledges that the insurance and financial planning industry does have a role to play in helping to shape a better future. However, the stumbling block I fear will be the usual cry of “the government” “the large businesses who make billions without paying tax” and, of course, the pantomime villains of all our problems – the bankers, will be trotted out whereas the harsh reality is that the way we contribute to and use taxes needs a radical overhaul so that the very real risks to women can be addressed.

Now more than ever before, we live in an age where people expect to have everything immediately and with little regard of how it is going to be paid for. The report is a call to action for everyone of us, but for women in particular to become more self-aware of the consequences of our choices and to empower ourselves to choose wisely.

Read the full report here

Suzanna Bailes