Securing fair financial futures for all

Skills & Apprenticeship Gap

Decisions, opportunities and encouragement afforded early on in life when we are growing up, support towards our education and skills choices, as well as ongoing learning and development during working life, have implications for our careers, earnings and financial wellbeing.

Some people – especially girls, minority and older workers – are more likely to experience skills gaps. It’s important we are informed of, and can access, skills and education options, understand the career opportunities they open up for us, and appreciate how they fit with our aspirations for our financial future.

Graduate & Qualification Gap

Going to university or taking a professional qualification is an opportunity and career investment. The study choices open to us, the decisions we make and the support we receive have implications for our long-term financial future.

Workplaces and careers are changing especially as more jobs become automated. Being equipped to make study and qualification choices including an understanding of the likely job opportunities, the security these afford, and the earnings prospects together with the financial commitments involved, empowers us to make decisions mindful of our future Financial Life Journey. We also need to ensure everyone is supported to succeed.

Pay & Earnings Gap

Access to work and opportunities in the workplace, the jobs we choose to do, our employment status, job security, who we decide to work for, and employers’ policies and practices can shape our career paths and earnings.

More traditional ways of working, workplace culture and unconscious biases can also contribute to pay gaps, and in turn to pension gaps, with implications for people’s financial wellbeing and their longer-term financial security. The rise in pay gap reporting helps focus attention on the root causes allowing steps to be taken to achieve better balance.

Flexible Working Sacrifice

Workplaces and careers are becoming more flexible and, nowadays, many of us are opting for reduced hours, self-employment and career breaks. However part-time working can impact promotion prospects, with implications for hourly pay and lifetime earnings potential as well as participation in workplace pensions. And people who are self-employed need to plan their own pensions.

While there is a role for employers to level up policies and practices, we all need to be financially mindful when changing work arrangements. This is even more vital as living longer and working longer is leading us to adopt different work-life patterns.

Cohabitation Pitfall

While marriage remains the most common form of relationship, cohabitation is increasing and cohabiting couple families have doubled over the last two decades.

Many see cohabitation as a modern, flexible approach. However, few of us are thinking through the financial implications of our relationship - including for banking, savings, insurance and pensions – and a high proportion of people are not aware that it lacks legal and financial protection on separation. For those whose roles at home make them dependent on partners, unless planned for, cohabitation can impact financial resilience if relationships break up.

Parenthood & Caring Penalty

The cost of raising a child has multiplied and today many families rely on both parents’ incomes. Family caring, including for the elderly as we live longer, can impact workplace participation, progression, pay and pensions creating financial gaps and dependencies.

While there is more focus on equal opportunity, in general it is mothers who primarily take parental leave and career breaks and carry the main burden of home and family caring, including for the elderly. Access to care varies and all people taking on caring roles risk sacrificing career earnings and pension contributions. This can lead to financial gaps as well as dependencies if money matters are not fully discussed and planned in a way that reflects relationship status.

Domestic Abuse Danger

Too many people - girls and women especially - experience domestic abuse, including financial coercion and economic abuse. The nature of domestic abuse means that abusers will use Moments That Matter as opportunities to control and coerce victim-survivors and this can have lifelong impacts on careers and earnings, health and financial wellbeing.

Mothers, separated and divorced women, are particularly at risk, adding to the stress of relationship break ups and longer-term financial worry. People with disabilities and the elderly can be vulnerable to financial coercion especially when accessing and drawing allowances and pensions.

Divorce & Separation Setback

Divorce and separation can have far-reaching financial impacts for couples, and many face financial difficulties through the divorce and separation process. Financial life and retirement saving post separation can be challenging especially for those balancing caring responsibilities and can lead to pensions gaps.

Navigating financial separation and settlements, child responsibilities and sharing pensions can be stressful particularly when financial imbalances exist. For primary carers, the Divorce & Separation Setback means re-starting rewarding work post break up is challenging, especially where careers have been curbed for family caring. Later life divorce may also limit opportunities to do so.

Wellness Threat

Our health risks are changing. The stresses of life, living longer and improved survival rates from common illnesses such as cancer, mean that we all need to be financially resilient through periods of our own and our loved ones’ ill-health.

Many more people today experience mental health issues impacting their livelihoods. Cancer and heart disease remain the most common causes of death, with a dramatic rise in drug misuse, suicide and dementia. Greater life expectancy also means more people are suffering, and need to fund care for, disabilities as they age.

Pension Deficit

Greater life expectancy, and old age care costs mean our retirement needs are rising while our ability to rely on state support is reducing. Intersectional differences in pay and access to pensions has led to gender, ethnic minority and other forms of pension gaps, as well as retirement dependencies between couples.

Some people are at risk of a pension deficit with insufficient money in retirement to provide for an independent life. This is often a result of caring roles, reduced working and lower pay as well as shifts in family structure (such as divorce and living alone), healthy wellbeing, home ownership, rising social care costs and spending rather than saving.

Longevity Trap

Living longer leads to our being unhealthy for longer with life expectancy impacted by living standards and socio-economic background. Many of us are financially unprepared for the costs of our old age care.

Later life ailments mean that many of us will need daily living support as we age, while a rise in old age disabilities - such as dementia- increases the likelihood of our needing to finance nursing care.

Rising old age dependency means working people will soon “support” three (and in future two) people in retirement. It’s vital our retirement planning factors in care especially as more of us live alone later in life.