New research from the Pensions and Lifetime Savings Association (PLSA) reveals that millennial (18-35 year old) women feel more financially anxious than their male peers contrary to research which suggests this age group has the smallest gender pay gap at five per cent.
Key financial indicators
Research of 1,001 millennials revealed that women were less financially confident than millennial men across a series of key financial indicators. They were less optimistic about career advancement (55 per cent of women versus 61 per cent of men) and almost twice as likely to report a decrease in their salary over the last six months (14 per cent of women versus eight per cent of men).
In addition, women were more likely to report increasing bills over the last six months (41 per cent to 33 per cent of men) and almost three times as likely to say they had borrowed more over the past six months (33 per cent vs. 12 per cent of men).
Women were also more likely to feel that the pressure to save for the future had increased in the last six months (51 per cent of women and 36 per cent of men) and were less optimistic about purchasing a home (26 per cent vs. 35 per cent).
Worse off than their parents
Similar proportions of millennials of both genders felt that they were less able to save than their parents (men – 57 per cent and women – 58 per cent) and that the basic cost of living is higher (men – 85 per cent and women – 88 per cent).
Moreover, 37 per cent of women and 30 per cent of men felt that they had worse ‘life opportunities’ than their parents’ generation which suggests that while the gender pay gap may have improved, they still perceive barriers to achieving their ambitions.
Confidence and knowledge
Additional Pan-European research released earlier in the year also suggests that women are generally less confident in their financial knowledge so less inclined to take calculated risks. However, the same research shows that the actual gender financial knowledge gap is smallest among Millennials suggesting their lack of financial confidence may well be unfounded.
Graham Vidler, Director of External Affairs, Pensions and Lifetime Savings Association, said:
“Typically, women have had smaller pensions than their male counterparts but with the advent of automatic enrolment, more women are being encouraged to save than ever before. It is therefore vital that the lack of financial confidence amongst millennials does not discourage them from taking advantage of workplace pensions and falling behind when saving for retirement.
“Early in a woman’s career, when the gender pay gap is at its lowest is arguably the ideal time to get into the savings habit and start thinking about retirement income. Over half of millennial women feel pressure to save for the future and using an occupational pension scheme offers a variety of advantages. Not only will they benefit from employer contributions and tax relief but also gain peace of mind for the fact that they are taking proactive steps to building a better standard of living in retirement.
“Employers need to ensure that they are engaging with this age group and helping millennials to feel more confidence about their retirement choices.”