There are generalisations about women and investing: they are too hesitant, too risk averse, they have too many other calls on their finances, are not paid equally … are they generalisations? Excuses? Actualities?
The Wisdom Council which worked with companies such as Scottish Widow, St James’ Place and Vitality to attempt to tackle the gender pensions gap claims Women have simply never considered investing – even when they are part of a pension scheme, they don’t think of themselves as investors (75% of those polled didn’t know they were investors, even though the recruitment criteria included involvement in a workplace pension).
While auto enrolment may mean more people have access to pension saving and investments a key part of the advantage is missing if there is no active investment involved – which it won’t be if these women actually invested in pensions don’t recognise themselves as investors.
The Wisdom Council’s Yes She Can campaign research showed that the average woman’s pension pot is one fifth of the average man’s pension and at current rates, it will take 100 to 250 years to address the gap. Additionally 49% of women had never invested and, of those, 85% didn’t think investing was ‘for people like them’.
The statistics run on. According to the Fawcett Society women took home on average £564 less per month than men in 2022 (£536 in 2021) and possible because of or exacerbated by the cost of living crisis 53% of women would use the additional money to turn on heating and lights more often, and 48% report that their mental health would improve. For many the prospects of improving things are not overwhelmingly positive as 35% of women want to work but are prevented by reasons including a lack of flexible working options and affordable childcare.
Fidelity has for years research and campaigned on women and money. Its most recent research shows that while women are passionate about tackling societal and environmental issues, with 57% wanting to take action against climate change, 40% want to improve poverty and homelessness and 34% would like to influence positive change towards animal welfare, many are unaware of ‘the positive impact they could have through their pensions and investments, with 68% unfamiliar with Environmental, Social and Governance (ESG) investing.
This is all somewhat depressing and rather makes us women look a bit silly.
But not really when one considers Fidelity research into the ‘gender pay rise gap’, which based on ONS data shows that taking the average salary for a 25 year old women was £25,066 and for men £37,817. Were those salaries to rise by 1% in real terms each year the average pay rise every five years would be £1,284 for women and £2,017 for men. Salaries at retirement would be £49,682 for women and £75,748 for men. The respective pensions at retirement, assuming an 8% salary contribution would be £276,403 and £419,006 – a difference of £142,603. That’s a lot less available to spend on heating, lighting or childcare, on climate change, improving poverty and homelessness and animal welfare.
And of course, these issues impact on all of us, on all our worlds, male or female. Which makes us all look a bit silly. And it leaves the investment industry with a job still to do to attract more investors.
Stephanie Spicer is head of content at Quill PR
When Luiz Inacio Lula da Silva won the Brazilian presidential election there were high hopes that he would address the issue of the destruction of the Amazon rainforest, preferably to halt it.
It is hard to get one’s head round the extent of the destruction of the rainforest.
According to the Brazilian Space Research Institute (INPE), 1,455 square kilometres (562 square miles) of rainforest were destroyed in September 2022 – an area almost twice the size of New York City. The previous record was for September 2019 when 1,454 km2 were destroyed.
So COP27 in Egypt coming so soon after the Election presented a perfect time for Lula da Silva to honour the commitment Brazil had made to end deforestation by 2030.
And he appeared to be on track to do that.
Lula da Silva told delegates he would end the illegal deforestation and went so far as to say he was to ask the United Nations to host the COP30 summit in 2025 in the Amazon rainforest.
According to the Financial Times Lula da Silva said: “It’s important for it to be in the Amazon. It’s important for the people who defend the Amazon to get to know what the region is. We will fight hard against illegal deforestation. We will take care of indigenous people.”
“This devastation [of the Amazon] will be a thing of the past. The crimes that happened during the current government will now be combated,” Lula said, “We will rebuild our enforcement capabilities and monitoring systems that were dismantled during the past four years.”
It is to be hoped that the news will encourage other countries to help and re-visit for example, The Amazon Fund – a forest preservation alliance set up to raise donations for non-reimbursable investments to prevent, monitor and combat deforestation and promote the preservation and sustainable use in the Brazilian Amazon.
At COP27 Germany and Norway indicated they were willing to restart payments to the fund which had been halted in 2019 due to the attitude of the then Brazilian Bolsonaro government.
It is not just the Amazon rainforest that needs protecting; encouragingly COP27 had news on other fronts. The European Union (EU) announced a 25.5 million euro investment in the protection and sustainable use of the Five Great Forests of Mesoamerica, which range from Mexico through Belize, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, and Panama, covering an area of over 120,000 square kilometres.
Here in the UK, we would be wise not to rest too much on our laurels. According to the Woodland Trust: ‘Irreplaceable ancient woods continue to be lost and damaged by house building, new roads and railways. Over 1,225 ancient woods across the UK are under threat from development while during the last 21 years at least 981 have been permanently lost or damaged. More insidious threats facing woods and trees include unseen reactive nitrogen air pollution from agriculture which strips trees of their layer of protective lichens and causes a fertiliser effect where grasses out-compete more delicate woodland flowers. This disrupts woodland ecosystems in ways we are only beginning to understand.’
The State of Nature 2019 report showed that “the abundance and distribution of the UK’s species has, on average, declined since 1970 and many metrics suggest this decline has continued in the most recent decade. There has been no let-up in the net loss of nature in the UK.” Key pressures on the UK’s biodiversity were found to be agricultural management; climate change; pollution and urbanisation (among others).
Here – and globally there are steps being taken to address the threat to biodiversity, including the imminent UN biodiversity conference COP15, belatedly taking place in Montreal in December, the theme of which is “Ecological Civilization: Building a Shared Future for All Life on Earth”.
There are other initiatives such as the Partnership for Biodiversity Accounting Financials (PBAF) which are helping the financial industry to “transparently assess and disclose their impact and dependency on biodiversity”. Currently it numbers 40 financial institutions (including some of our clients) with assets over $9trn. The independent foundation, based in the Netherlands notes that: “Through their investments, financial institutions can play an important role in the conservation and sustainable use of biodiversity, contributing not only to the biodiversity targets of the Convention on Biological Diversity (CBD), but also to the reduction of investment risks. For financial institutions to take up this role, the availability of science based, reliable data on the impacts on biodiversity is an important precondition.”
It might not take long to fell swathes of forests and woodland, but it will for new ones planted to grow. And what will be lost while generations wait for that to happen?
What are the main topics of conversation on my commute into London? The horrors in the Ukraine, inflation, party-gate? No, none of these; it is which days people are working in the office, which at home and how they are adjusting to the ‘new new normal’. Is the four day week inevitable?
Businesses all over the country have reacted very differently to the post-pandemic world of work. Some like the large City banks are mandating staff to revert to the full pre-pandemic Monday to Friday working regime, whilst others are taking a rather more flexible and pragmatic approach.
Of course, there are many more issues at stake here than merely hours in the office. Whilst many staff have enjoyed the working from home experience, others have not, missing the buzz and camaraderie of an office environment.
One thing is for certain, the adoption of Zoom and Teams meetings during Covid-19 means that those meeting mediums are here to stay, leading to much greater time efficiencies and lower travel costs and an end to the often travel-related stress.
Going forward, an organisation’s WFH policy is going to be a significant factor in both retaining and attracting new talent and – if not already explicit in the job ad – is likely to be right up there in the interviewee’s top three questions. A busy time for all HR departments for sure.
How companies react depends very much on the type of business they are in or whether they feel they can trust their employees not to abuse a much more flexible and self-empowering approach to the working week. Client facing service sector businesses clearly need to ensure quality of service is maintained but balance this against the risk of wholesale resignations should they revert to a zero flexible working policy.
Some firms are taking quite a radical approach, with PwC, for example, announcing that its 22,000 staff can finish at Friday lunchtime over the summer. Others may follow and this will almost certainly be the precursor to the official four day working week that many have been calling for to create ‘positive well-being’ and a better work life balance.
Image credit: Isabel Andrade on Unsplash
Now the ISA season is over, is that it for clients investing into their ISA pots till next year? Does the flurry of activity pre-5 April to encourage investors to use their ISA allowance before they lose it? Does it risk savers missing out on the opportunities presented by pensions?
And will any manage to save anything anyway for the foreseeable future?
Providers and advisers have a role to play in encouraging them to and in promoting pensions as much as ISAs. The two should go hand in hand.
But it is not going to be easy.
Many people lost their jobs as a result of the pandemic and the age-old (excuse the expression) scandal of the over fifties being overlooked for jobs is still evident.
And of course, the effects of the pandemic lockdown on the economy has been superseded by Russia embarking on a war with Ukraine.
The Office for Budget Responsibility (OBR) heralds worse to come for the consumer.
‘The conflict also has major repercussions for the global economy, whose recovery from the worst of the pandemic was already being buffeted by Omicron, supply bottlenecks, and rising inflation,’ it says. ‘A fortnight into the invasion, gas and oil prices peaked over 200 and 50% above their end-2021 levels respectively. Prices have since fallen back but remain well above historical averages.
‘As a net energy importer with a high degree of dependence on gas and oil to meet its energy needs, higher global energy prices will weigh heavily on a UK economy that has only just recovered its pre-pandemic level. Petrol prices are already up a fifth since our October forecast and household energy bills are set to jump by 54% in April.’
The OBR predicts that if wholesale energy prices remain as high as markets expect, energy bills are set to rise around another 40% in October, pushing inflation to a 40-year high of 8.7% in the fourth quarter of 2022.
As it points out: ‘Higher inflation will erode real incomes and consumption, cutting GDP growth this year from 6.0 per cent in our October forecast to 3.8 per cent. With inflation outpacing growth in nominal earnings and net taxes due to rise in April, real livings standards are set to fall by 2.2 per cent in 2022-23 – the largest financial year fall on record – and not recover their pre-pandemic level until 2024-25.’
It is imperative individuals save and invest where they can and as much as they can and as early as they can. As Dan Brocklebank, director UK, Orbis Investments has recently highlighted, the majority of people underestimate the power of compounding interest. Orbis carried out research asking folk if they invested £100 on a child’s behalf into the stock market via a Junior ISA, assuming 8% return pa what would they have when the child hit 18. Only 6.6% were able to calculate near the correct amount of £400. The average ‘guesstimate’ was £246. This shows a clear need for financial service providers to educate clients – and potential clients – about the power of compounding over longer terms.
Dan said: “Compound growth may not be intuitive to most. As long as people underestimate the power of compounding, they are likely to miss out on the long-term benefits of investing in markets. Investing in global equities has been shown to outperform cash over the long term, and the ‘magic’ of compounding plays a part in this.”
The award is particularly appreciated as it is voted for exclusively by financial journalists.
In presenting the award, the judges said: “Congratulations to Quill PR, which returns to claim the title that it held in 2017 and then again in 2018. As with all our PR and communications awards, it was the financial journalist community that had the final say in determining boutique PR agency Quill PR as the winner, with the outcome decided by an extensive poll carried out in April 2021.”
The judgement advised that recognition was given to Quill PR as a “longstanding and quality agency, with a diverse client base”. In the initial round of judging, the agency was complimented on providing “good examples of strong relationship building during lockdown”, with praise for their client wins during a difficult year.
The judges concluded: “Quill PR scoops this award for its work for both new and existing clients across the year.”
Sam Emery, managing director of Quill said: “We are delighted to win this award, especially as it is voted for by the press with whom we work so closely. 2020 and 2021 could have proved overwhelming in more ways than one. However, the Quill PR team more than punched above its weight, remaining a go-to source for press seeking quality comments and interviews and also as a trusted partner to our clients.”
Quill PR is pleased to announce a new member to the team, with the hire of Stephanie Spicer as Head of Content.
Steph has worked as a personal finance and investment journalist for over 20 years. She has held senior editorial positions on various industry titles. These include Money Management, Investment Week, Cover and Corporate Adviser. Most recently she has freelanced for What Investment Magazine and What Investment online. She has also acted as a PR consultant for the best part of two decades.
Sam Emery, Quill Managing Director, said: “We are delighted to have Steph on board. Her role is to continue developing the content writing service Quill offers to clients. As our client base grows so does the need to fulfil clients’ requirements for quality copy and get clients’ messages out to their relevant audiences.”