• Monday, April 22, 2024

Business

Call to reduce pension scheme threshold to help Asian women

By: SARWAR ALAM

CAMPAIGNERS have called on the government to lower the figure for auto-enrolment on to pension schemes after research revealed that nearly half of south Asian women in the UK have no savings for retirement.

An estimated 17 per cent of south Asian women in employment do not currently meet the £10,000 annual income threshold to be auto-enrolled on a pension scheme compared to just four per cent of white women, according to a report by Scottish Widows, a life insurance and pensions company.

Findings from the report showed that 40 per cent of south Asian women had no money saved for retirement and 32 per cent of ethnic minority women were likely to cite the state pension as a source of income for retirement.

“The government needs to look at the auto-enrolment threshold; one of the things we’ve highlighted through the report is that most people impacted by the threshold are women,” Ranila Ravi-Burslem, intermediary distribution director at Scottish Widows, told Eastern Eye.

Ranila Ravi-Burslem

The figures were even higher for black women – with 54 per cent saying they have little or anything saved for retirement, and more than two thirds concerned they will run out of money during their retirement years.

There are currently 1.4 million women earning fewer than £100 a week through the state pension. “Women tend to be the ones who work part time. Women tend to be the ones in jobs that are lower paid. And then you put the south Asian lens on it, and yes, they would be impacted more than white women,” said Ravi-Burslem.

Scottish Widows has partnered with Black Girl Finance – a platform for black, Asian and minority ethnic women to get financial advice through coaching, podcasts, workshops, book, and events.

They will host events on women’s experiences with money through talks by financial experts and influencers covering topics such as the cost of living crisis, the impact of divorce and single motherhood and building wealth.

“These are quite scary statistics, which we need to highlight and address,” Selina Flavius, founder of Black Girl Finance, told Eastern Eye.

Selina Flavius

“The findings are clear – urgent action needs to be taken now to ensure that black women are not unfairly affected by a lack of advice and support while enduring unjust financial challenges.

“The ethnicity pay gap is a key contributor to this, which shows that black, Asian and minority ethnic women earn lower salaries than white British women, which can undoubtedly have a negative impact on their financial resilience, long-term pensions and investment planning.”

People of Bangladeshi or Pakistani heritage in the UK earn 16.9 per cent and 20.2 per cent less than white employees, while black employees earn on average 9.2 per cent less, according to the Office for National Statistics.

Ellen Muthu is the inclusion and racial equity lead at FLAIR, technology experts who use data to address and tackle racial bias in business.

Ellen Muthu

Muthu told Eastern Eye there needs to be a concerted effort looking into why women of Bangladeshi and Pakistani heritage earn less than their white counterparts. “We need to understand and explore how classism affects these groups. Data shows that Indian people in this country are afforded greater social mobility and upward mobility than people from Pakistani and Bangladeshi backgrounds,” said Muthu.

“It’s actually worth going out to these communities and finding out direct from them why this is. Carry out interviews and focus groups on the experience of these women and understand their economic situations.

“If you think about pension planning, it’s primarily thinking about people from middle class backgrounds. If you are from working class backgrounds, or lower socioeconomic settings, it might be that you have more pressing concerns – you might be having to think more pay-cheque to pay-cheque. You’re in a group where you’re not afforded that luxury of thinking ‘what happens later down the road?”

“There’s also a sort of an understanding that you have family and community who are still going to be there to help you in old age.”

Bushra Begum, a 56-year-old teaching assistant from Hornchurch, east London, has been employed at a primary school for almost 30 years.

She is in the process of getting divorced from her husband and told Eastern Eye she faces an uncertain financial future.

“Though I have worked for so many years, I never even thought about pension. My husband was the main breadwinner. The money I earnt was just extra to help him,” Begum said.

She revealed that her salary fluctuated over the years as she split her time raising her three children, but said her earnings were between £16,000 and £22,000 per year for most of her career. “Our house we bought is under my husband’s name. I am hoping I will get a part of it. But what do I do in the longterm to get me by day-to-day? What money is there for my future? I will not get married again so I cannot rely on someone else.

“My husband has a very good pension. He will be fine. I felt there was no need for me to be on a pension. I opted out so many years ago. I didn’t want to pay the extra £200-£300. Everything I earned went towards supporting my husband, my kids.”

Ravi-Burslem said with south Asian women, some cultural issues need to be addressed. “It is an overwhelmingly patriarchal mindset still, which is, the man of the house is the main breadwinner, and therefore, the woman doesn’t need to think about financial matters,” she said.

“I’m sorry, this is a broad sweeping generalisation, but that cultural norm is really important because there is almost a narrative which is, ‘don’t worry, you will get married, you will have kids, you will look after the kids and you will be looked after by your husband’.

“The idea that you get married, your husband looks after you and then your your retirement plan becomes your children looking after you is still the expectation in places like India and I wonder how much of that is also translated to the UK.”

Ranila said it was vital that south Asian women have access to relevant financial knowledge, especially the younger generation of women who can learn early on the importance of pension schemes and financial independence. “We need to acknowledge the needs of this particular community are different or more heightened, and therefore we need to put interventions in place that are relevant for that particular community,” she said.

“How do we get to target younger women and girls? By supporting their financial education and empowerment and giving them the right information to make the right choices.

“How do we increase the awareness and knowledge of what provision exists?

If you’ve been employed and you have paid taxes and National Insurance, what can you expect?

“The tools and the information exist, we need to get it into the hands of the women who need it.

“It needs to be a collective effort. It has to be the government, the public sector, the private sector, the broader community coming together to solve the problem.” Muthu said organisations have a responsibility to educate their employees on pension plans. She advises workshops run by financial advisors who can help women with their long-term financial planning. “These women can then take this information outside of the sessions and repackage it and teach it to other members of their community,” she said.

“We need to look at what information has specifically been designed for south Asian women and how are we making sure people sharing that information are also representative of those who understand some of the cultural differences that might be encountered.”

Having south Asian representatives going into community centres and places of worship are a way of accessing south Asian women, according to Flavius.

“People do want to speak to people that look like them and may have similar experiences,” she said.

“And also having that confidence that you are accessing services where there are translators available to be able to give you the information in the language that you speak is key as well because language it comes to accessing information.”

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