3rd September 2014 by The Harried House Hunter
Men are from Mars, women from Venus apparently. This quote is often used to justify the way that the two sexes appear to take different views on any given issue. And, according to research from MGM Advantage published this week, that difference of perspective even manifests itself in differing views on the value – and need for – financial advice.
From the MGM research, three facts leap at me as being of real significance:
Cynics of the male chauvinist variety might suggest that if women valued financial advice more, then the apparent worries and lack of options in (2) and (3) might be less concerning. Yet that would be oversimplifying the issue, and in the process ignoring massive contributing factors. The gender pay gap will often mean that women have been less able to save for retirement than their male counterparts, which may well explain the increased financial worries. It should also be noted that board-level employees (which, statistically, are still much more likely to be men) generally have more access to funded financial advice than other employee grades, and this may explain why women are perhaps less familiar and comfortable with this concept.
So let’s forget the gender differences, and instead focus on the average of the results. If you average the results (a blunt instrument this – as I don’t have the source data so am literally working from the mean of the figures quoted above) you get the following unisex responses:
Obviously, the actual data may differ from this – but probably not by that much. And either way this suggests that around 4 in 10 are worried about financial needs in retirement, and a broadly similar number are unaware of what options will help them bridge any gap. More worrying still is that less than half would value expert financial advice to help them with this issue.
An unconnected (yet complimentary) survey published last week by Comparethemarket also highlighted the lack of basic financial knowledge in the average adult Brit.
Amongst other findings were the following alarming facts:
Given that interest rates are at historic lows – and have been widely reported as such by the media since the start of the financial crisis – this serves to demonstrate how the UK working population has something of a tendency to ignore, or at least fail to grasp, the basics of finance.
The bottom line is that there are probably areas of everyday finance which are, to borrow from Donald Rumsfeld, unknown unknowns to both sexes – and it’s only be means of basic financial education (and more detailed financial advice where necessary) that the figures quoted at the beginning of this article will start to look more promising.
The good news is that Financial Education is now taking root in the school curriculum – so the next generation of employees should at least start ahead of the learning curve. Yet that still leaves the existing 30 million UK workers to be educated. And that can’t start soon enough.
So regardless of planet of origin, it seems clear that a sizeable proportion of both sexes need to land on planet financial-reality rather quickly. If not then the UK working population may well be facing a rather impoverished retirement.
Steve Herbert is Head of Benefits Strategy at Jelf Employee Benefits