An introduction to finances for women

Despite progress, women still face challenges that can impact their wealth over a lifetime. The gender pay gap, a difference in levels of financial knowledge and lower investment participation all contribute to financial disparities. Recognising these barriers is the first step towards overcoming them.

The gender pay gap is the difference in average earnings between men and women. It exists for several reasons, including career choices, time taken for caregiving and workplace discrimination. As a result, women often earn less than men for the same or similar work, leading to lower lifetime earnings, smaller pensions and reduced financial independence.

Since 2017/18, UK employers with 250 or more staff have been legally required to report their gender pay gap data, highlighting disparities across the public and private sectors. In 2024, the average hourly pay for male employees in the UK was £23.11, while female employees earned £19.92 per hour. This widened the UK’s annual gender pay gap to 13.8%, up from 13.2% in 2023. Though the gap fluctuates, it remains a significant barrier to financial equality.

In many industries, women continue to earn less than men for the same work. Career breaks, often taken for childcare or caregiving, can make the gap even wider. Returning to work at a lower salary or struggling to regain previous earning potential affects not just immediate income but also long-term financial security. Over time, lower wages mean smaller pensions and less ability to save and invest for the future, increasing the risk of financial insecurity in later life.

Studies suggest women, on average, feel less confident managing investments, pensions and long-term financial planning, often due to societal norms and historical exclusion from financial decision-making. As a result, many women miss out on opportunities to grow their wealth and secure their financial future.

For generations, financial decision-making was considered a male responsibility, leaving many women feeling unable to manage investments or plan for long-term goals. This lack of confidence, not capability, can lead to hesitancy around important financial decisions, potentially resulting in lower investment returns, reduced pension savings and increased financial vulnerability.

The investment gap is the difference in how much men and women invest. Women typically invest less and take a more cautious approach, often due to lower earnings, a lack of confidence, or concerns about risk. Since investing is essential for long-term wealth, this gap can leave women with smaller financial reserves, less security in retirement and fewer opportunities for financial freedom.

Women tend to save more but invest less, meaning they miss out on the long-term growth of the stock market. When combined with lower earnings and career breaks, this cautious approach can create a significant financial shortfall in later life. Take pensions for example. According to Scottish Widows research, the average woman will only receive income of just £12,000 per year during retirement, after income tax and housing expenses, compared to £17,000 for the average man. Without investment growth, pensions and savings may not be enough to sustain you in retirement.

These gaps, in pay, financial knowledge and investment know-how, create long-term financial disadvantages for women. But by actively addressing these gaps, women can strengthen their financial position and work towards greater equality in wealth and opportunities.

Knowing your worth is the first step to securing fair pay. Use platforms like Glassdoor and LinkedIn Salary Insights to compare your earnings with industry benchmarks and colleagues in similar roles. With this knowledge, you can negotiate more effectively—rather than accepting the first offer, confidently advocate for a salary that reflects your experience and contributions. Practising negotiation skills can also help you feel more prepared for these discussions.

Pay transparency is another game-changer. Pushing for policies that require employers to disclose salary ranges leads to fairer workplaces. Don’t hesitate to ask about pay structures during job interviews—it’s an important step in ensuring equal compensation.

Investing in career progression and skills development also plays a key role in closing the gap. Further training, certifications, and leadership opportunities can boost your employability and earning potential. Tackling workplace bias is just as important. Supporting equal pay initiatives and flexible working policies helps drive change, while joining professional networks that champion women’s careers can provide valuable resources and support.

Finally, consider the long-term financial impact of career decisions. Career breaks, if not planned carefully, can affect your earnings and pension, so it’s worth exploring options like freelance work or investments to maintain financial security during time away from full-time employment. By taking these steps, you can work towards closing the gender pay gap, increasing your financial opportunities and securing long-term stability.

Understanding money gives you confidence and control. Explore books, podcasts, online courses, and workshops designed to support women’s financial goals. Resources like The Money Charity, Clever Girl Finance and government-backed initiatives can help you build knowledge and make informed decisions.

Joining women-focused financial groups like Female Invest or Ladies Finance Club can offer valuable insights, peer support and encouragement. Learning from others and sharing experiences can make managing your finances easier and more empowering.

Investing isn’t just for experts; it’s a powerful tool for long-term financial growth and anyone can do it. If you’ve been reluctant about investing before, due to fear of risk or lack of knowledge, the first step is education. Books, courses and professional advice can help you feel more secure in your decisions. Joining investment communities or seeking guidance from financial planners can also provide valuable insights and support.

Procrastinating about investing often means missing out on potential growth. While saving is important, keeping too much cash in low-interest accounts won’t build wealth. Even small, regular investments in diversified assets, such as stocks, bonds and index-tracking funds have potential to grow significantly over time. Make the most of employer pension schemes, Individual Savings Accounts (ISAs) and other tax-efficient investment options to ensure your money works harder for you.

Taking control of your finances is the best way to achieve financial independence and security. But you don’t have to do it all on your own. A professional financial adviser can help with your short-term needs as well as your longer-term goals and can work with you to develop a strategy to achieve them.

¹ Business Biscuit

² Scottish Widows