money

More than half of women avoid asking for a pay rise

11 March, 2020 By WiC

Wages have been increasing at a faster rate than inflation since 2018. According to statistics released by the Office of National Statistics, the average weekly income for full-time workers has seen a year-on-year increase of 2.9%, rising from £568 to £585.

Delving into the salary expectations vs reality, research collated by Instant Offices reveals that in 2019 UK wages saw the fastest rise in just over a decade, increasing by 3.9% in just three months.

The difference between men and women regarding salary negotiations

One-third of women state they believe they are over qualified for their current role, regardless, data show that women seem less likely to approach or instigate a conversation around money in the workplace. In fact, growing number of women prioritise work-life balance, flexible working options and better hours over money.

Workers who	Men (%)	Women (%)
Feel comfortable asking for an increase	64	43
Have never negotiated their salary	40	55
Are more likely to negotiate working hours than pay	41	56
Are more likely to negotiate on specific parts of a job	55	42

In their book, “Why Women Don’t Ask“, Linda Babcock and Sara Laschever reveal that men are four times more likely than women to ask for a raise—and when women do ask, they typically request 30% less than men do. In a study of 78 masters degree students, Babcock, a Carnegie Mellon University economics professor, found that just 12.5% of women negotiated for their starting salary, versus 52% of men. That leads, by her estimate, to as much as $1.5 million in lost income over the woman’s career. The gap is closing somewhat among younger women, who are more likely to ask for raises and are more likely to be the family’s primary breadwinner, but women are still far from parity when it comes to negotiating pay. Moreover, an Australian study of 4,600 employees found that while women were as likely as men to ask for raises, they were 25% less likely to receive them.

Money disparity starts young and affects women throughout their lives

Moreover, money disparity starts young with boys receiving more pocket money than girls. It’s no wonder, then, that women’s financial security is compromised, literally from cradle to grave. See Insuring Women’s Futures, a recent report from the Chartered Institute of Insurers on the points in life when women’s financial security becomes vulnerable.

Three top tips for negotiating your remuneration package

Donna Hughes, founder of Launch Negotiation, shares below three top tips to prepare for salary negotiations.

1. Know your worth

Most of us tend to undervalue ourselves at the best of times, therefore it is necessary to perform market research to create an objective assessment of your worth. Make sure you review job advertisements for similar roles in the sector, as advertised on websites such as LinkedIn, Monster and Indeed. Next, initiate discussions with recruitment consultants within your industry to validate the salary range and benefits for similar positions. If you are applying for a position within your existing company, leverage your trusted network to further ascertain the salary range for the role.

2. Think outside the box

Whilst salary is often considered the most important component of the remuneration package, take time to list other variables available for negotiation. What other components of the remuneration package, besides salary, are important to you? By thinking creatively, you may be able to enhance other aspects of your remuneration package, such as bonus, holiday entitlement, pension contribution, training and development opportunities private medical insurance, company shares, company vehicle, flexibility to work from home, amongst many other factors.

3. Step forth with confidence

When you receive an offer, express your gratitude and ask for the proposal to be provided in writing, for your consideration. It’s natural for us to compare the offer against our current package; however, it’s likely that the new role will have increased responsibility, and therefore you should be compensated accordingly. How does the offer compare against the salary range for similar positions? If this is not aligned, provide feedback that demonstrates your gratitude for the offer, your excitement to start in the position, but share your insight on the remuneration package for similar roles, and request for the offer to be aligned within the uppermost part of this range. Remember, you deserve this raise, but you’ll likely need to ask for it.

Instant Offices have some additional handy tips

Have a list of reasons justifying why it would be in your manager’s best interest to pay you more with emphasis always on your ability and what you can bring to the department and company.
Prepare your manager for the upcoming discussion to allow them to also prepare; they may need to talk to the finance team, or even promote you to a more senior role. Send an email outlining your request and a suggested date for a face-to-face meeting to sit and discuss things in full.
Don’t threaten to leave, unless you’re actually prepared to. If you’re wanting a pay rise, unless you have another job offer lined up, it is not sensible to threaten to quit. Worst case scenario your employer says no and you have no other card to play, resulting in long-term doubt about your loyalty to the company. However, your best case you current employer tries to match the offer.
Think about the timing. If your company has just announced their budgets, restructuring or cuts then factor that in accordingly. You don’t have to wait for your annual review, or even a pay review, just choose a suitable time when there isn’t significant pressure on your manager or the business as a whole.

Practice, practice, practice

Donna Hughes suggests practising your negotiation skills on a regular basis, in a variety of settings, to help you refine this skill and she’s offering readers an exclusive discount on the range of workshops hosted by Launch Negotiation. For further details contact hello@launchnegotiation.com citing “WiC”

Insuring Women’s Futures, the 6 Moments that Matter

16 December, 2019 By WiC

Insuring Women’s Futures is a voluntary, market-led programme established under the Chartered Insurance Institute to improve women’s financial resilience. It brings together a cross-section of business leaders, experts and influencers drawn from policy, regulation, academia and the third sector to support making lasting change. For the past three years, these contributors have shared their insights, experiences and expertise.

The result is a series of ambitious, practical Manifesto recommendations.

Insuring Women’s Futures has identified ten overarching recommendations where interventions can be made to improve financial resilience for women and wider society in the UK. The recommendations take into account how life in the UK is changing and the implications for all of our financial resilience, now and in the future. The interventions combine policy and practice and are centred on where the most impact can be made, targeting Moments that Matter across women’s financial life journeys.

Recommended interventions

Inspiring young women to own their financial future
Pensions equality in the workplace
Equal pension rights for those on low pay
Workplace flexibility and financial wellbeing to address the impact of part-time on pay and pensions
Financial engagement and wellbeing strategies that reflect women’s whole life journeys
Insurance and financial services’ role in supporting financial futures
Fair pensions outcomes for those in relationships and for break ups
Pensions for carers and a national conversation about caring
Gender-disaggregated data and use in policy and practice
Female Financial Resilience Forum

These Moments that Matter impact women across the life stages from girls to elderly women according to individual life journeys. For example, becoming a mother or caring for an elderly relative have different consequences depending on whether and how women are working, studying or are in good or poor health.

The 6 Moments that Matter

Growing up, studying and re-qualifying
Entering and re-entering the workplace
Relationships: making up and breaking up
Motherhood and becoming a carer
Later life, planning and entering retirement
Ill-health, infirmity and dying

12 Perils and Pitfalls

By analysing women’s life circumstances, the decisions women take and the life events women face, the research highlighted key differences in men’s and women’s risks in life. 12 Perils and Pitfalls have been identified as the top financial risks faced by women through the life course. In addition, the research identifies patterns in how the Perils and Pitfalls impact women’s financial resilience at different life stages on the Female Financial Life Journey, with the 6 Moments that Matter serving as key intervention points where meaningful change can be made.

Download the Manifesto

Visit our searchable Knowledge Bank for a range of reports and studies on gender diversity, leadership and related topics.

Unpaid housework of 26 hours per week equals £11k per annum

30 October, 2019 By WiC

Whilst the number of women in employment is at its highest rate since records began, research by thinkmoney has uncovered that unfortunately, all isn’t as it seems.

After analysing the working patterns of Brits, their research has revealed that women make up two-thirds of all part-time roles. With part-time roles limiting employees progression, financial independence and retirement benefits – it is clear that there’s a part-time gender bias in Britain.

Morever, according to a recent study by the Trades Union Congress (TUC), Brits are working two and a half weeks more, per year, than any other country in Europe.

While the average working week has decreased by 18 minutes over the last decade, at this rate it will take 63 years for British working patterns to match those elsewhere in Europe.

Key Findings

Women have more part-time roles than men – across all UK regions.

On average, women make up almost two-thirds (65%) of all part-time roles in the UK.
The ‘part-time gender bias’ is more prevalent in the North-East; women are responsible for almost three-quarters (71%) of all part-time roles

On the other hand, London has the least ‘part-time gender bias’. Women account for 51% of part-time roles (580k) whereas men make up a very close 49% (285k).

Revealed: Women Would Earn £11,009 From Unpaid Housework

With more women in part-time work, they naturally end up completing more work around the house – such as laundry, cleaning and for some, childcare.
However, this has led to women taking on 60% of all unpaid housework – each week women spend 26 hours on this, as opposed to men who complete 16 hours.
If women were to be paid for this housework, they would receive £11,009.

London workers put in the second least paid overtime hours in the country

London has one of the longest working weeks when adding together paid overtime and contractual hours (38.4 hours), but workers in the capital are only reported to work 176.8 hours paid overtime, along with the North East and South West. However, these figures only reflect paid overtime and it’s possible that the unreported, unpaid figures could be much higher.

Employees in South East work the lowest overtime hours

Workers in the South East put in the least paid overtime at only 166.4 hours (24 days). They work 62.4 hours less than Northern Ireland employees, or the equivalent of almost two working weeks.

The TUC estimates five million workers in the UK have put in more than £32 billion unpaid additional hours per year. So, overtime figures could be even higher than reported. Employees in Wales gave an extra £819 million of free labour in 2017.

Read about other geographical areas

Generation Austerity: Brexit and Beyond for 18-25yr olds

5 December, 2016 By WiC

MRM’s fourth annual Young Money Report, “Generation Austerity: Brexit and beyond”, looks at the attitudes to finance of 1,000 18-25 year olds who have grown up in the dark shadow of austerity. The study considers the views of young people on a range of topics including

pensions and benefits
advice and access
saving and spending and investing and the economy

as well as featuring contributions from key industry experts across the financial services industry.

Much of the writing and research of this report took place in the wake of the UK’s momentous decision to leave the EU. Many hadn’t expected this, including the markets, with sterling crashing on the news and the stock markets plummeting.

Young people and Brexit not quite what it appears

There was an unprecedented period of national soul-searching in the days that followed and it was to young people that a lot of attention turned. The first stats which emerged showed that they had gone against the status quo, with 71% of 18-24 year olds voting to remain.[1] However, the turnout stats told a different story. Research by Sky Data indicated that of 18-24 year olds, only 36% had actually bothered to vote.[2] So a familiar story emerged of young people watering down their bargaining power in important matters by not exercising their constitutional rights.

Trust in Financial Services low

A similar narrative around a lack of engagement crept into the results of the survey. Trust in financial services is low, and apathy high. Many young people are unwilling to engage fully in key areas of financial services including pensions, saving and investing – all of which are vital to the financial wellbeing of the population.

Face barriers that parents didn’t

However, the report also reveals that they face a number of barriers that their parents didn’t. Job uncertainty and few opportunities to get on the housing ladder, coupled with soaring rents and a lack of disposable income have all contributed to the inability of ‘Generation Austerity’ – let’s call it ‘Generation A’ – to engage with the sector. Nearly half of those we surveyed (48%) expected to be worse off following Brexit.
The report explores some of the reasons behind this, and together with the contributors, examines how we can encourage Generation A to interact more effectively with financial services, particularly as we consider the Brexit fall-out.

Read the full report

Visit our searchable Knowledge Bank for reports on Diversity, Leadership and associated topics.

DC Universe – it’s not about outer space

6 June, 2016 By WiC

The ageing of populations around the globe is causing an acceleration in the shift to Defined Contribution pensions.

We all know, because we’re often reminded, that we are living longer. A greying society is not just a trend in the UK, however; it is a global phenomenon. According to the UN’s medium population projections, the number of people aged over 65 will rise from just over 600 million today to close to 2.5 billion by 2100.

Furthermore, over the next century, the growth in the number of older people is expected to far outpace the rise of the working age population, as the chart below demonstrates. The UK is on a similar path.

Source: World Economic Forum

Dramatic increases in life expectancy have a profound implication for politics and the welfare state; moreover we see many of the models designed to manage those systems start to come under pressure, or even unravel.

Workplace pensions are a case in point. Defined benefit (DB or ‘final salary’) schemes promise participants a highly predictable income in retirement, based on a formula linked to earnings and length of service. If you have a DB pension, your employer is responsible for funding the scheme and for ensuring there’s enough money to pay your pension income at the time you retire.

But the DB model has mainly relied on a broad base of young members to support fewer retired members. As the ratio of old to young gets bigger, not only does DB become more difficult to administer, it presents a significant financial risk to companies, governments, and other institutions.

Defined contribution (DC) pensions, on the other hand, require you to build a ‘pension pot’, with you and your employer putting money into your chosen investments. Unlike a final salary scheme, there are no income promises; the value of your pension pot is determined by the performance of your investments. Consequently, most of the risk is placed on your shoulders rather than those of your employer.

Off balance

Final salary schemes have long been giving way to DC-type plans as companies transfer pension liabilities off their balance sheet. In the UK, many final salary schemes have closed, and there has been growing participation in DC schemes brought about by ‘auto-enrolment’.

But the same phenomenon can be seen around the globe, as regulatory changes serve to accelerate the rate at which retirement markets converge towards DC.

Japan, for example, has one of the fastest-ageing populations in the world. It has a long history of DB pension plans, but the government is legislating to expand coverage of its DC scheme nationwide.

In the US, the move from DB to DC has been happening for several decades. In 1980, of those private sector workers who were in a workplace pension scheme, 60% were only covered by a DB scheme. But by 2006 that had fallen to just 6%2. Stricter funding requirements imposed by government have often been used to defend the closure of many schemes.

Great expectations

So how does the move from DB to DC affect people in the UK? Put simply, the government now expects much more from individuals in terms of having the expertise to manage their own retirement planning affairs.

You are expected to translate the value of your pension into income terms and make appropriate investment decisions; you must ensure you have saved enough to maintain your lifestyle over an unknown period, and you must understand costs in retirement to avoid an income shortfall.

Admittedly, a minority of people enjoy making such decisions, but the reality is that most of us don’t know how to manage all of the risks described above. New rules introduced last year, which give people the freedom to do what they like with a pension from age 55 onwards, only serve to increase the possibility of them making a mistake.

Building a pension pot and drawing an income from it requires you to manage a combination of risks, and demands a different mindset. In the past, individuals retiring with a final salary pension or annuity have generally only needed financial advice at the point of retirement. Going forward, those retiring with a DC pension will need to take financial advice not just up to that milestone, but throughout their retirement.

To receive a complimentary guide to wealth management, retirement planning or Inheritance Tax planning contact Sophie-Jane Keelaghan on 07970 299980 or email sophie-jane.keelaghan@sjpp.co.uk

1 World Economic Forum, 2 October 2015

2 Handbook of Aging and the Social Sciences, 2011