Benefits & Pensions
Women less ‘financially confident’ than men when it comes to retirement: BMO
Women feel less “financially confident’ than their male counterparts when it comes to retirement, according to new data from BMO.
A special report from the BMO Real Financial Progress Index focusing on women and financial confidence discovered a stark contrast — a 16 percentage point difference — regarding how women and men feel about one of life’s top priorities: retirement.
It found that a significantly lower number of women (52 per cent) feel financially confident about retiring at their target age compared to 68 per cent of men. In addition, almost three quarters (73 per cent) of women have no financial plan in place to reach their goals compared to 64 per cent of men with no plan, it said.
Among the women who are not confident in their retirement plans, saving more (32 per cent) was reported as the top action they should take to retire on time, followed by investing (12 per cent), limiting spending (10 per cent) and earning more (9 per cent). Despite this, 74 per cent of women said they feel in control of their finances compared to 84 per cent of men.
89 cents on the dollar
In Canada, women on average earn 89 cents for every dollar earned by men according to Statistics Canada1, affecting the amount of money the average woman can save and invest for retirement.
Adding to financial stress among women, BMO’s survey found 87 per cent reported having a fear of unknown expenses and 63 per cent said keeping up with monthly bills causes them anxiety.
“As the cost of inflation and the financial impacts of the pandemic have significantly affected many women, it’s understandable that they are feeling the need to rebuild their savings and feeling less confident about retiring at the age they had planned,” said Gayle Ramsay, head, Everyday Banking & Customer Growth, BMO.
“Financial planning and financial literacy are imperative when navigating finances to ensure customers are making real financial progress. With most women reporting they have no financial plan in place, they can start to alleviate their anxiety and take control of their finances by evaluating their budgets, adjusting spending habits accordingly, and committing to a savings and retirement plan.”
Financial literacy gender gap stems from childhood upbringing
BMO’s survey also found a gap between how women and men report being educated about personal finance from a young age. When asked about whether respondents received family support around financial literacy by having conversations around budgeting or financial planning, 61 per cent of women said they did not receive support compared to 57 per cent of male counterparts.
The report also found the following differences in financial confidence when it comes to gender:
- Almost three quarters (73 per cent) of women reported not having a written financial plan in place compared to 64 per cent of men
- More men have a financial advisor (42 per cent) compared to women (37 per cent)
- Only 17 per cent of women use free digital tools compared to 25 per cent of men
Launched in February 2021, the BMO Real Financial Progress Index is an indicator of how consumers feel about their personal finances and whether they are making financial progress. The index aims to spark dialogue that will help consumers reach their financial goals and to humanize a topic that causes anxiety for many – money.
The research detailed in this document was conducted by Ipsos in Canada from January 16 to February 12, 2023. A sample of 3,401 adults ages 18+ in Canada were collected. Quotas and weighting were used to ensure the sample’s composition reflects that of the Canadian population according to census parameters.
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