Research Shows Women Attain just ¾ of Men’s Wealth at Retirement
5th December 2022
A new global study from WTW (NASDAQ: WTW) highlights that women in Ireland are expected to reach retirement with 80% of the wealth accumulated by men. The WTW Global Gender Wealth Equity report shows that this Irish figure is ahead of the global average whereby women are expected to reach retirement with just 74% of the wealth accumulated by men. Overall, the research found that the differences across all countries across all continents, ranged from 60% at worst to 90% at best.
Furthermore, the study highlights that globally the gender wealth gap at retirement increases with seniority across all countries. In Ireland, women in senior expert and leadership roles were found to have 70% of the accumulated wealth that their male counterparts enjoyed at retirement, while women in professional and technical roles were found to have 77% of the wealth of their male counterparts. In operational and frontline, the gap was significantly less prevalent at 93%.
The study showed that the gap in Ireland is slightly narrower than the global figure. Globally, women in senior expert and leadership roles have less than two-thirds (62%) of the accumulated wealth that their male counterparts at the point of retirement. For mid-level professional and technical roles, the gap was still substantial at 69%, but it narrowed considerably to 89% for frontline operational roles.
Looking at Ireland in comparison to other European countries with regard to wealth accumulated at retirement, Ireland had the fifth largest overall figure behind Spain (86%), Austria (84%), Denmark (81%) and Norway (81%). Notably, the Irish figure was ahead of European neighbours such as Germany (76%), France (75%), Sweden (74%) and the UK (71%) to name a selection.
Commenting on the research, Maria Quinlan, Head of DC Services at WTW Ireland stated, “These research findings are very informative and an important benchmark. While Ireland compares favourably to the global average and the majority of other European countries, there is still work to be done and it is important to understand the drivers of such inequality.
As such, there are several factors such as the pay gap between men and women, delayed careers due to family care and gaps in financial literacy to name a few.”
Looking at addressing such inequality in Ireland, Maria continued,
“Through our work with businesses across Ireland, we would advise employers to look at a range of measures. These would include reducing their gender pay gap, encouraging financial literacy and confidence, ensuring pension contributions for women, enhancing caregiving support and promoting flexibility in the workplace.
Overall, employers in Ireland need to consider a holistic range of policies and supports that address existing inequalities and promotes parity in the future”.
Manjit Basi, Senior Director, Integrated & Global Solutions, WTW, said: “The results from our global analysis are startling. It shows that there is a gender wealth gap consistently across the 39 countries that we studied. The primary drivers contributing to gender-based wealth disparity include gender pay gaps, and delayed career trajectories. Additionally, gaps in financial literacy and family caregiving responsibilities outside the workplace influence women’s participation in paid employment and therefore their ability to build wealth.
“It’s imperative that activities around gender diversity, equity and inclusion broaden to look at economic wealth at the end of women’s working careers.
Pay is a fundamental factor that underlies the gender wealth gap and while addressing the gender pay gap will partially close the wealth gap, it won’t eliminate it entirely.”
The study highlights that there has been an increasing focus on reversing the trend of gender discrimination through the recent environmental, social and governance (ESG) awakening. In addition, corporate efforts to further diversity, equity and inclusion have helped narrow the gender pay gap and underrepresentation of women in board and leadership roles. Yet, there remains more to be done.
“Gender inequity in wealth accumulation is under-researched and overlooked. The reality is that the wealth inequity issue and its causes and effects are multidimensional and should be studied and addressed as such,” said Manjit. “By focusing on accumulated wealth at retirement, the disparity can be quantified, and actions can be taken through broader society, government and organisations to equalise wealth outcomes.
“While no single solution alone will solve the gender wealth gap, effective leaders need to employ a range of approaches to narrow it.”
The WTW Global Gender Wealth Equity report follows a collaboration between the World Economic Forum (WEF) and WTW earlier this year which released initial insights into the wealth gap in its Global Gender Gap Report.