Major new research reveals a ‘glimmer of hope’ on tackling gender and ethnicity pension gap

The Department for Work and Pensions has calculated that the typical woman in her late fifties has private pension wealth only just over half of that of the typical man (£81,000 for women v £156,000 for men). Previous Government and industry reports have demonstrated the significant gender pension gap, in which women have less pension wealth than men of the same age.

At the same time, pension industry research reports have suggested that men and women from Britain’s ethnic minorities also tend to have lower average pension wealth than their White British counterparts.

Taken together, this would suggest that at the intersection of these two groups – women from ethnic minorities – pension disadvantage could be expected to be particularly acute. With Black and Asian females accounting for nearly 1 in 7 of the female population of England and Wales, this is a significant and growing issue.

However, the new jointly commissioned research has uncovered encouraging progress for the pension prospects of these women.

A glimmer of hope

The report is based on more than 12 hours of focus groups, facilitated by Opinium Research, and involving contributions from more than fifty Black and Asian women across a range of ethnic groups and age ranges up and down the country. The groups discussed a wide variety of issues relating to financial planning for later life, and the full report includes extensive verbatim quotes from these women.

The groups discussed a wide range of issues relating to financial planning for later life, and the full report includes extensive verbatim quotes from these women.

Although the research identified major challenges for these groups (see below), there were two positive high-level findings that offer hope for the future.

• The relative disadvantage faced by women from ethnic minorities could be starting to fall. This mainly reflects generational differences, as younger women typically have higher qualification levels, are much more likely to be in paid work (see notes to editors), and aspire to financial independence than previous generations
• Although there is a generally low level of knowledge about pensions and some mistrust, there is also a very considerable hunger for information and explanation. There was clear evidence that, if these women felt they knew and understood better how pensions worked and what they could deliver, they would be more likely to engage.

A very wide range of issues were raised throughout these focus groups, but the more detailed key themes were:

• Signs of a generational shift, with younger women much more likely to be – and expect to be – financially independent, relying much less on other family members, compared with previous generations;
• A relatively low baseline level of knowledge, understanding, and trust around pensions;
• A desire for accessible information about pensions and savings;
• Evidence of a wide range of strategies being used to save for later life, well beyond pensions, including the use of property and other investments;
• Strong hopes and dreams for later life, but anxiety about the ability to attain those goals.