Money Matters Festival: Where do We Stand Today? Women and the Economy
💸 There are many challenges when it comes to managing finances as women. We’ll try to understand what the current economy is like, and what can be changed. From pension to wealth gaps, to the structural issues and what women are tirelessly doing to try to and change the game.
*This is the recording of Money Matters Festival held on Oct 9th, 2022 at The NED in London.*
Speakers:
Isabel Berwick: Host of the FT's Working It podcast and co-editor, Working it newsletter. Talks about inclusion, management, future of work, genderequity, and leadershipskills
Romi Savova: CEO of PensionBee, a leading online pension provider she founded in 2014 to simplify pension savings.
Bev Shah: Fearless Girl. Championing equality and culture change within Investment Management with The City Hive.
Selina Flavius: Founder and author of Black Girl Finance. You will find Selina on ITV Lorraine’s Saver Squad!
Staying calm in this economic climate
Anyone who reads the headlines will be feeling a little bit anxious and just wondering what is going to happen next — what is even happening right now? That feeling will be echoed around the country and, possibly, around the world.
It's important to remember that we are all in this together. The outside environment is very uncertain, but we've also made a lot of progress along the way.
Given the external environment, it’s important to focus on what you can control — your money, your expenditures, your savings and what you do with that. All of this is within your control.
Focus on building your financial resilience — whether that’s in the form of saving for an emergency fund or exploring your investments. Remember that the economy is quite cyclical, so we are likely to see a recession at least once in our lives.
History does not repeat, but it writes. Try to see the current market as the sale of the century — bargain hunting time. If you've got a small amount of money that you can put in, you will see that if that money is for your pension or for something in the future, this is a great opportunity to invest.
Don’t look at the headlines, look at your own finances and plan out what you want. There is a cost of living crisis coming, so be mindful of that as you head into Christmas, because none of us know actually what the bills will look like next year.
Where do We Stand Today? Women and the Economy
The persistence of various gaps in finance
“Your gender makes no difference if you are a good investor. Women are constantly being told we don’t know how to take risks - it’s not true.” - Bev Shah
Traditionally, finance and the financial space was built for men. More women are building banks and platforms that allow us to take control of our finances. At the same time, the way the media markets money to us as men and women is very different. Men are often taught investment strategies and women are told to buy less shoes. We really need to be mindful of these stories and habits that we've picked up over the years.
Pay gaps are caused by systemic and ingrained histories, so it will take a long time to unpack them. But what we can do in the meantime is to make sure that we're asking for those pay rises. Be intentional with everything you do with your money.
Women, at different points in their lives, can have ÂŁ100,000 less in their pensions than men. The reason why that number exists, why this gap is so incredibly wide, is because society is set up in a way that favours wealth accumulation for men over wealth accumulation for women. A lot of the free work that comes with childcare, it ends up being a woman's business.
Pay should be equal for men and for women doing the same work. We also need to enable men and women to work equal hours, because even if we close the pay gap, the hour gap still means that women will have less in their pensions than men. And to do that, we need to share the responsibility of childcare and if we don't do that, then it will never be equal.
It is less than 50 years since women were allowed to invest in this country and not personally invest, but to step foot on the London Stock Exchange floor. We are now sat in a room packed full of women who are interested in their financial future, and we have, so we have made huge strides.
The City has now recognised that women collectively are not a niche, but a revenue chain. Women may not be valued the same in society, but women are going out there and breaking down doors. The direction of travel is there, and women just have to keep shouting.
How women invest their money
There are lots of reasons why you can be a good investor or a bad investor, but your gender is not one of them.
Women are more likely to invest in line with their values when compared to men. This is something that Pension Bee tapped into by offering its clients products that allow you to invest in companies that are not associated with oil and fossil fuels.
There’s been an increasing sea of change, with ESG becoming of increasing interest, especially to female investors.
However, ESG can be a very muddy space, because there's so much terminology and jargon. This means that you have to do your homework. It is also important to remember why you're investing because there is a narrative that women only invest to save the world, but women also invest to make more money.
If you want to know where your money goes, look at who you're investing in, the company you're investing through. Look and see who’s on the board of that company, because they're taking your money and they're making money off you, and you can decide who you invest with.
Try and find yourself a female fund manager to invest with. They may not get it right, they may not always outperform, but they probably have the skills that actually their peers may not have.
An economy that prioritises women?
“Money is a tool. We shouldn't feel guilty about having it. Without it we can’t help others. Yes, we want to support a good cause, but we need to get by. It doesn’t have to be an either/or binary. We can take those shackles off” - Selina Flavius, Black Girl Finance
Policy changes are needed in order to help close the gender related money gaps. One of these policies absolutely has to be reforming childcare. Women are giving up jobs in order to be able to stay home and look after their children. If you want to do that, that's fantastic, but if you are forced to do it, it’s completely unfair.
There is also an overall societal shift that we need — genuine shifting that comes from building on tax breaks for our children and subsidising childcare.
The next policy is pay transparency — employers must disclose statistics on their gender pay gaps, whether there is a gender balance in the company, what is their maternity return rate? Being armed with this information is very important to women who are actively making decisions of where to work.
Then, including financial literacy skills in the school curriculum. Too many of us aren’t taught financial basics in our childhood, which can contribute to money issues in the future.
Unfortunately, a lot of the time the change needs to start at home because it's going to take a long time for the government to do the things we want them to do. Talk to your friends, speak to your children, do what you can to campaign for the things that matter to you. Focus on what you can control and change, and do your part.
“Women can have £100,000 less in their pensions than men. The world is set up in a way that women do a lot of the free childcare. It ends up being a woman’s business. Solution? Close the pay gap, and ensure women work equal hours.” - Romi Savova, CEO and founder of PensionBee