HSBC’s Study on the future of retirement highlights the particular vulnerability of women

The HSBC group has released the second report of the 2011 edition of "Future of Retirement 6" named "Why family matters", and that surveyed more than 17,000 people in 17 developed and emerging countries across the world.

The aim of this study is to understand the repercussions of increasing life expectancy on the behaviour of individuals regarding retirement and how they prepare for it financially.

This second part is more particularly interested in the family’s role in preparing and planning for retirement and the role played by women across the globe, with special focus on what is distinctive in France compared with the rest of the world.

The study highlights the following elements:
 Despite the progresses made regarding gender equality, women are still very vulnerable. In France, 58% of women in their fifties associate retirement with financial hardship as opposed to 36% of men of the same age.
 The family - a safe haven in France: French women do not consider the issue of retirement for themselves, whatever their level of income. It is only once they have taken care of their children, their family and their home that they start thinking about it. Women’s savings go towards the children first and foremost, to the detriment of their retirement savings.
 Men often remain in charge of major budgetary items (repaying loans, rent, retirement savings) while women’s responsibilities are more concerned with everyday life.
 As far as savings are concerned, the East is less cautious than the West regarding financial risk.

Despite progress made regarding gender equality, women are still very vulnerable

In France, 58% of women in their fifties associate retirement with financial hardship as opposed to 36% of men of the same age.

Regarding wealth management, all studies show that men and women adopt very different behaviour. While women live 6 years longer than men and must therefore make provisions for additional income, women are less proactive in creating and managing their wealth.

Maternity has consequences on the long-term finances of women in two ways:
 Women are a lot more likely than men to give up work to have children, which imply financial losses for them in the short or long term (47% of women worldwide as opposed to 15% of men).
 Furthermore, the study shows that women play a less active role in the household’s financial affairs once the children arrive, which is not generally the case for men when they become fathers.

So for half of women, they stop working full-time and find themselves disadvantaged both from a financial point of view as well as with regards to their role in planning savings.

The family, a safe haven in France

French women do not consider the issue of retirement for themselves, whatever their level of income. It is only once they have taken care of their children, their family and their home that they start thinking about it.

Across the world, passing on wealth to children is important, for men and women. But in France, ensuring the future of one’s children is a particular priority, even more for women.

This is what makes France stand out from the other countries surveyed: 79% of French women consider it important or very important to leave their children an inheritance. In comparison, only 58% of women in Canada consider this important or very important.

As to the question of living near to their family on retirement, French women again stand out very clearly from the rest of the world: 3 out of 5 French women consider it very important to live near their family on retirement; nearly 60% as opposed to 46% of women worldwide. This data has never been measured as clearly until today. Again, we observe that the family is a safe haven in France.

The man takes the lead within the couple when planning for retirement

Worldwide, 4 out of 10 men declare that they take sole responsibility in planning their family’s retirement, but this statement contradicts claims made by women: there is indeed a gap between the way women and men think they are involved in preparing for their financial future as a couple. When they are asked who takes care of preparing or examining their retirement plans, women are generally more likely than men to answer that they share this task with their partner.

According to the HSBC study, the disparity between the genders regarding retirement planning is consistent over all age groups, which leads one to believe that attitudes relating to this aspect of family finances do not vary over time.

A lack of involvement in this area leaves women potentially exposed to financial hardship when they get older.

The household budget is the only area where women are more likely to take sole responsibility since nearly two-fifths of women around the world (37%) assume this responsibility alone, as opposed to 34% of men. Household finances are also the only area in which women are more proactive than men.

However, the gap between the genders tends to narrow among couples in their thirties as men are more involved in the household budget compared with previous generations.

As far as investments and savings are concerned, the East is less cautious than the West regarding financial risk

The financial crisis shook the trust of Westerners toward long-term investments. It seems that Asians, probably less affected by the recession than Westerners, are more inclined to risk-taking as they are in a position to profit more greatly as a result.

The attitude towards risk is completely different in the West and in Asia. There is also a strong difference between men and women. The households in developed countries like France, Canada, the United States and the United Kingdom are more cautious when confronting risk.
 There are significant differences in how the West and the East address risk, especially as far as China and France are concerned. In China, 12% of people declare themselves to be "cautious" as opposed to 51% in France.
 There is a clear difference between men and women: for example, Chinese women are more inclined to risk-taking than Chinese men.
 Nearly half of those questioned around the world (44%) rely on cash savings to finance their retirement.
 The French and French women in particular, stand out among all the other countries for their great aversion to risk.
 59% of French women and 40% of French men declare they are "conservative" in their investment behaviour, to the extent that they are prepared to sacrifice investment performance as a result (compared to 39% of women and 25% of men worldwide).