Women’s Growing Economic Power: New Opportunities, Critical Needs

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With projected global spending power of $18 trillion, women are an increasingly powerful force in today’s economy. And in the U.S., female spending power is estimated to be up to $15 trillion.

Women’s growing participation in the workforce has also boosted the world’s economy. Some studies have found that if women enter – and stay – in the U.S. workforce at the same rate as Norway, the U.S. economy would be $1.6 trillion larger than in 2018 – a 3 percent growth rate. In the U.K., the economic outlook is similar: The employment rate of women of “prime working age” increased from 57 percent in 1975 to a record 78 percent in 2017. And by 2025, bridging the gender gap could lead to an additional £150 billion in gross domestic product with more than 840,000 additional women added to the workforce.

And as spending power increases, a woman’s role in key financial decisions such as personal investments has increased dramatically. “From a consumer spending standpoint, women dominate the market,” says Meredith Jones, partner and global environmental, social and governance (ESG) practice leader at Aon. And research from 2018 shows that in certain investment categories, women are playing an increasing role.

However, even as a woman’s financial power strengthens and her role in the workforce and investment markets expands, female workers face challenges that their male counterparts do not. One area that needs to be addressed is the retirement savings gap. Employers looking to help fill this gap should consider a solution that plays to a woman’s strong financial savvy: a focus on financial wellbeing.


A recent Aon study shows that only three in 10 U.S. women workers are on track to retire by the age of 67. However, the investment outlook isn’t as bleak.

Subject to the impacts of COVID-19, by 2023, women are expected to control between $81-93 trillion in private wealth worldwide, or about 34 percent of the total. “The level of investable assets women control is consistently increasing globally. This presents a significant opportunity to serve an increasingly important client base,” Jones says.

A recent study, Women and Financial Wellness: Beyond the Bottom Line, conducted by Merrill Lynch in partnership with Age Wave, found that women’s first concern regarding money is family – 77 percent of women say they view money in terms of what it can do for their families. The same study found that 65 percent of women say they want to invest in causes that matter to them, and 52 percent of women investors are already involved in or interested in social impact investing.

Aon’s Global Perspectives on Responsible Investing report reached a similar conclusion. Jones notes: “The collective push by millennials and women for social impact investing is largely responsible for the twofold increase in total assets in this category over the past five years.”

Understanding Retirement Shortfalls And Focusing On Financial Wellbeing

Even as women’s influence in the workplace and the investment world increases, they face a critical issue in retirement savings. Women workers typically have both greater retirement needs and lower levels of retirement savings than their male counterparts.

Aon’s DC and Financial Wellbeing Employee Survey 2018 – U.S. finds that only one-third of women have set a retirement savings goal. However, of those with a goal, two-thirds feel they are saving enough for long-term needs. These women are also confident in managing their finances.

A longer life expectancy – along with lower compensation over their lifetimes – creates a larger financial burden for women retirees than for their male counterparts. Perhaps because of this additional burden, women expect a more fluid transition to retirement. Half of working women expect to transition to part-time work before fully retiring.

Employers can help women close their retirement gap by focusing on education and retirement planning tools targeted toward women workers. According to Grace Lattyak, partner, Retirement and Investment Solutions at Aon, employers should:

• Measure the retirement readiness differences between male and female employees.
• Develop targeted communications and tools to encourage female workers to save more, defer retirement and maximize Social Security benefits.
• Provide lifetime income solutions to help all employees – particularly women – to better manage longevity risk. Lifetime income solutions can significantly reduce the risk of outliving assets.

Melissa Elbert, partner, Retirement and Investment Solutions at Aon, underscores the importance of educating women on their particular financial concerns and the strategies they can use to secure their financial future.

Elbert says, “Helping women understand potential shortfalls they face is the crucial first step. We can then proactively address those shortfalls by creating retirement plans that encourage earlier savings at higher levels, with lifetime income options.” Employers should be aware of and consider other barriers for women saving for retirement, such as student loans or credit card debt. “And of course, the retirement plan should be part of a broader financial wellbeing strategy incorporating education and tools to build a solid financial foundation.”

Women In The Economy: Powerful Today, Potentially More Powerful Tomorrow

As consumers, investors and employees, women represent an important role in the economy – and that role could become even more significant. The 2015 McKinsey Global Institute report The power of parity: How advancing women’s equality can add $12 trillion to global growth, found that advancing women’s equality could add $12 trillion to the global GDP by 2025, an amount roughly equal to today’s U.S. and Chinese economies combined.

And the long-term outlook points toward a more inclusive workforce, Elbert says. “Diversity is the next big growth strategy and across employee and investor populations – women in particular have the power to grow.”