Understanding your clients: Women and the gender gap

How to tailor equity release advice for women

In 2024, Royal London carried out research into the gender wealth gap, releasing a report titled ‘Tackling the Gender Pension and Wealth Gap’. We’ve completed a deep dive into this report, alongside other key industry reports, to explore the financial implications that women can face in retirement; read on to find out how the financial gender gap might affect your clients and how you can tailor your advice to meet their needs.

Is there a financial disparity between men and women?

The latest data from Royal London suggests improvements to the gender pay gap, with the report showing a decrease over the last decade to 7.7%* among full time workers. However, statistics show that women in the UK are still at a disadvantage when it comes to their financial resilience in later life.

Women are less likely to have a pension

According to Handelsbanken’s recent wealth survey, 29% of women do not have a pension, compared to 20% of men. Combined with a gap in pension pot size by around £65,000, this means that women may have less money and security in retirement than their male counterparts.

Women are more likely to prioritise further responsibilities over their career

Additional responsibilities may create challenges that disproportionately affect women throughout their adult lives. Royal London’s report, ‘Tackling the Gender and Pension Wealth Gap’ explored this topic thoroughly, finding the following statistics.

After choosing to raise a family, women are more likely to:

• Say they feel less confident in the workplace after taking maternity leave.
• Believe that working part-time is their only option after taking leave to care for children.
• Consider leaving the workforce entirely- 62% of women said they had thoughts about leaving work to cope with childcare responsibilities, compared to 42% of men.

Even after retiring, women are more likely to have extra care responsibilities than men. In fact, women are nearly 3 times more likely than men to retire early to care for a family member.

The gender pay gap could affect savings potential

A crucial report by Schroders Personal Wealth (SPW) found that over one-third of women believe their lack of savings is a result of gender-specific factors such as the gender pay gap and career breaks for caregiving.

On average, women also feel significantly less confident in their retirement savings, with just 11% describing themselves as “very confident,” compared to 25% of men. Combined with other challenges like lower financial literacy and longer life expectancy, these factors may make it more difficult for women to plan effectively for retirement.

How to tailor equity release advice to women

By acknowledging the financial differences between men and women, you can better understand your clients and offer them tailored advice and support.

These circumstances show how important it is to understand that female clients may come to you with less of a plan for their future finances; some may have never spoken to a financial adviser before. Here are 3 ways you can start tailoring equity release advice for women, assuming it is the right choice for them.

1- Highlight how equity release can allow homeowners to stay in their home

For many adults in later life, the family home represents comfort and stability and may be where they raised and took care of their families or have built a strong community of neighbours. The idea of selling or having to leave their home could be upsetting, so it is essential to explain how equity release could help them avoid the stress and expense of moving.

2- Take advantage of our educational resources

We offer a suite of exclusive materials including informative guides and leaflets available through your BDM, designed to make equity release easier for your clients and their families to understand. These resources could be especially useful for a client who isn’t financially secure and requires extra support to fully understand the process.

3- Consider options that offer increased flexibility

For a female client who has been unable to save up enough for her retirement, one of her priorities may be ensuring that she has greater control over how and when she can access the equity from her home. There may be product features on the market that offer flexibility for your clients, such as drawdown options or the ability to make voluntary repayments.

Julia’s story

When Julia’s partner passed away suddenly, she found herself in a tough situation where she wasn’t sure if she would be able to stay in her home. She could no longer afford to finish home renovations that would cater to her disability, as she had been financially dependent on her partner’s retirement income.

After talking with an equity release adviser, Julia decided to access the wealth locked in the value of her home and release equity. She was able to access an initial sum of £60,000 that allowed her to complete the improvements, and a further drawdown facility of £90,000, which she could use to fund a personal carer and continue living independently in her home.

Julia’s story highlights how important understanding your client’s situation is. By recognising their position, you can ensure that your advice is tailored to their long-term needs, supporting them to establish financial security.

If you have any questions regarding what was discussed in this article, please get in touch with our Business Development Team.

This is a fictional scenario based on a real customer experience, created for illustrative purposes only. This is directed at FCA authorised firms and intermediaries only. Not approved for customer use.

https://adviser.royallondon.com/articles-and-guides/research/tackling-the-gender-pension-and-wealth-gap/