Financial Challenges For

Higher-
Earning
Women
In times as uncertain as these, it's
vital that we take charge of our
financial futures. Planning ahead can
make all the difference, helping us
achieve our financial goals, find
peace of mind, and provide for our
loved ones.
Introduction
& Contents
As career-driven women, we face unique challenges, but rest assured, they
are not insurmountable. It's no secret that women have encountered hurdles
in the finance world, but as society progresses, we're seeing more women
taking on financial responsibilities. Understanding these challenges and
equipping ourselves to overcome them is key. This guide covers five of the
most pressing financial challenges women face:

The Gender Pay Gap

Pages 3 & 4

The Retirement & Pension Gap

Pages 5, 6 & 7

Confidence in Investing
Pages 9 & 10

The Cost of Care

Pages 11 & 12

School Fees & Financial Planning

Pages 13 & 14

Developing a Financial Plan

Pages 15 & 16

Financial Challenges for High-Earning Women

THE
GENDER
PAY
GAP
The Gender Pay Gap

The gender pay gap is a stark reality in the UK. On average, women are paid 90p for every
£1 that British men earn. This gap is 1even more pronounced in sectors like business,
finance, and healthcare management, where women can earn up to 28% less than their
male peers, despite having the same qualifications and working hours. 1

So how can you prevent this? When entering a new job or during performance reviews, be
prepared to negotiate your wage. Research industry standards and confidently present your
worth and abilities. If company salaries are available online, find out the pay range for your
role and adjust your negotiations accordingly.

The disparity in earnings becomes glaringly evident as women progress in their careers. For
instance, according to the Office of National Statistics, by the age of 48, the average man
earns 14.3% more than the average woman, even if they started out earning roughly the
same. Additionally, women often face a 'motherhood penalty,' as the demands of childcare
can lead to career breaks and reduced
2 earning potential.

At Morrinson Wealth, we are committed to helping women bridge the pay gap and navigate
other financial challenges. Join our Financially Empowered + group to network, share ideas,
and gain valuable knowledge from like-minded career women.

According to the Office of

National Statistics, by the
age of 48, the average man
earns 14.3% more than the
average woman, even if they
started out earning roughly
the same time.
ONS, 2022

Financial Challenges for High-Earning Women

THE
RETIREMENT
AND
PENSION
GAP
The Retirement & Pension Gap

Lower wages throughout our careers can lead

to significant disparities in pension savings
between men and women. Taking time away
from work for caregiving responsibilities,
including raising children, contributes to this
growing gap. Unfortunately, three million
women don't meet the £10,000 auto-
enrolment eligibility for workplace pensions. 4

As people are living longer than ever, it’s

crucial to have plenty of savings in place for
retirement. You don’t want to run the risk of
running out of money later in life. Our
retirement calculator can help you find out if
you are saving enough for the future and if a
funding gap is likely to occur and accumulate.
If you face a funding gap, you may wish to
consider making additional contributions to
your existing pension from your monthly pay
or bonus.

Try Our Retirement Calculator

Please speak to your Morrinson Wealth

Partner or get in touch to discuss ways in
which you can work towards this financial goal.

Email us:
info@morrinsonwealth.co.uk
Visit:
morrinsonwealth.co.uk/contact-us

Financial Challenges for High-Earning Women

The Retirement & Pension Gap

While the average UK pension pot has nearly reached £111,600, Women's pension savings
often remain stagnant. By age 65, women typically have saved around 35% less than their
male counterparts. 3

To close this gap, it's never too late to start saving for your retirement. Remember - the
longer you contribute, the more compound interest you'll earn.

Make sure you are enrolled in your workplace pension - not only are you contributing to your
retirement, but so are your employer and the government (in the form of tax relief).
Although the current auto-enrolment minimum contribution is 8% of qualifying earnings (3%
of which must be paid by your employer), you can contribute more than the required 5%,
and some employers might agree to pay contributions to match your contributions.

Consider the ’50-70 rule’, which suggests that you should

be aiming for an annual income of between 50-70% of your
pre-retirement income.

For example, if you’re used to living on upwards of

£100,000 a year, you should be looking at a retirement
income of at least...

£50,000 - £70,000
per year

Please speak to your Morrinson Wealth Partner or

get in touch to discuss ways in which you can work
towards this financial goal.

Email us:
info@morrinsonwealth.co.uk
Visit:
morrinsonwealth.co.uk/contact-us

Financial Challenges for High-Earning Women

CONFIDENCE
IN
INVESTING
Confidence in Investing

Investing can be daunting, especially with the

fear of market volatility. Historically, women
may have been less involved in finance, and
their investment habits often reflect caution. A
study by Warwick Business School has
indicated that women are now outperforming
men in terms of investment success – we’re
talking not just amongst casual investors, but
hedge fund managers too. 7

If you’re just beginning your investment

journey, start small to gain experience without
risking a large sum. Avoid impulsive decisions
based on short-term market fluctuations;
focus on long-term growth. Also be sure to
diversify your investments across different
asset classes to avoid concentration risk.

The value of an investment with St. James's

Place will be directly linked to the
performance of the funds you select and the
value can therefore go down as well as up.
You may get back less than you invested.

Higher earners should consider investing

regularly by drip-feeding money into the
market at regular intervals, rather than
investing large sums such as bonuses all at
once. This approach, which is known as
‘pound cost averaging’, can help average-
out returns and protect against a sharp
drop in the market. Don’t give in to fear
during temporary market downturns.
It’s almost always better to take a longer-
term view.

Remember! Time IN the market is

better than timing the market.

Financial Challenges for High-Earning Women

THE
COST
OF
CARE
The Cost of Care

Women often take on caregiving responsibilities, which can inevitably impact their income
and retirement savings. This includes caring for children, elderly parents, or family members
with disabilities.

While the COVID-19 pandemic came with its challenges, flexible working options introduced
during the pandemic, have also allowed women to balance personal and professional
responsibilities better.

If you have caring responsibilities, it’s worth familiarising yourself with the Carers Leave Act
2023, set to take effect in April 2024, which will allow carers to take a week of unpaid leave
each year, providing essential support.

Further monetary Government support such as Universal Credit can also supplement your
income during maternity leave. You can claim Universal Credit and maternity pay at the
same time; however, some or all of your maternity pay will be deducted from the amount of
Universal Credit you are entitled to.

Care costs are often a missed expenditure when we consider income needs in retirement.
The costs of residential care homes are significant and may require substantial outlay. Since
October 2023, the government introduced a new £86,000 cap on the amount anyone in
England will need to spend on their personal care over their lifetimes, however it’s important
to factor these costs into your financial plan to avoid financial shockwaves later.

The current average costs for care

8
homes in the UK.

Residential Care Nursing home care

£760 £960
per week per week

£3290 £4160
per month per month

Financial Challenges for High-Earning Women

SCHOOL
FEES
AND
FINANCIAL
PLANNING
School Fees & Financial Planning

Rising tuition fees and childcare costs are often challenges for mothers. To be expected,
childcare costs are generally highest in London – however the rest of the UK is not immune
to the burden. If you have more than one child needing care, or you require full-time
childcare, costs can quickly escalate.

Additionally, parents who chose to send their children to private schools also shoulder a
further outlay in fees. The average annual fee for independent secondary schools is now
£23,340 for day pupils and £40,116 for boarders, the highest of the century. This is a
rise of 5.6% - the highest year-on-year rise since the 2008 financial crash. 6

Consider tax-efficient savings options like Stocks & Shares ISAs and Junior ISAs to fund
childcare, school or University costs. If grandparents are looking for an effective way to
reduce Inheritance Tax (IHT), they can also contribute, although the investment must be
opened by a parent or legal guardian. These contributions, if executed correctly, can reduce
Inheritance Tax, and make use of tax-free annual gift allowances.

If you are planning to grow your family, these fees should form part of your overall financial
plan, and you should put measures in place to deal with the extra expense as early as
possible.

The value of an investment with St. James's Place will be directly linked to the performance of
the funds selected and the value may fall as well as rise. You may get back less than the
amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are
generally dependent on individual circumstances.

The average annual fee for independent

secondary schools is now:

£23,340
for day pupils

£40,116
for boarders, the highest of the century.

Financial Challenges for High-Earning Women

DEVELOPING
YOUR
FINANCIAL
PLAN
Developing a Financial Plan

When it comes to developing a financial plan, the best approach is to create a bespoke plan
designed specifically for you with the help of a trusted adviser - a tailored plan is crucial.

Around 39%
7
of British adults don't feel confident managing their own
money. To help you decide on the focus for your plan, think carefully about your current
financial position, review your current savings and decide your appetite for risk and your
future goals.

Financial plans are not static; they need regular updates to adapt to changes in your life,
financial situation, and goals. Seek guidance from trusted advisers to help you stay on the
right track as your financial journey evolves – your goals might incorporate different stages
of life – for example buying a house, starting a family, rebalancing your work/home life, or
saving for retirement.

Ensure you have the basics covered. Create a budget outlining your monthly income and
expenses. This will help you manage your expenditure and save to meet your financial goals.
Couple this with an emergency fund, covering three to six months of living expenses. This
fund will serve as a safety net in the event of unexpected financial difficulties. If you have any
debts, be it mortgage or other expenses, make a strategy to pay them off gradually; prioritise
high-interest obligations first, while making only the minimal payments on other
commitments.

As your income grows, consider higher tax rates on capital gains and tapered pension
allowances in your plan – this is where working with an adviser can take off the pressure as
rules and regulations become more complex.

With a personalised financial plan in place, you can confidently navigate the financial
challenges whatever life throws at you.

Financial Challenges for High-Earning Women

References

1 The Gender Pay Gap by The Office of National Statistics (October 2022)

2 The Gender Pay Gap by the Office of National Statistics (November 2023)

3 Human Capital Estimates in the UK by The Office of National Statistics (April 2022)

4 The Gender Pension Gap in Private Pensions by The Office of National Statistics (June
2023)

5 Unpaid care by age, sex and deprivation, England and Wales by The Office of National
Statistics (February 2023)

6 Private school cost in London: what you can expect to pay by Simply London (October
2023)

7 Are Women Better Investors than Men? By Warwick Business School. Survey was
conducted with 2,800 investors. (Accessed Nov 2023, with Expresse Permission from
WBS)

8 Care home fees advice: How to pay, Carehome.co.uk (November 2023)

Please speak to your Morrinson Wealth Partner or get in touch to discuss ways in
which you can work towards this financial goal.

Email us:
info@morrinsonwealth.co.uk
Visit:
morrinsonwealth.co.uk/contact-us
 Get in touch now

If you wish to discuss anything mentioned in this document

further, please speak with your Morrinson Wealth adviser or
get in touch through the links below to speak to someone
who can take your through your options.

020 7516 5775

morrinsonwealth@sjpp.co.uk
www.morrinsonwealth.co.uk

2023 Top Rated Firm

Morrinson Wealth LLP is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which
is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth
management products and services, more details of which are set out on the group’s website www.sjp.co.uk/products. The ‘St.
James’s Place Partnership’ and the title ‘Partner’ are marketing terms used to describe St. James’s Place representatives.
Morrinson Wealth is a trading name of Morrinson Wealth Management LLP

SJP Approved 26/03/2024