Women’s Enterprise Scotland calls for urgent end to 'structural discrimination' faced by female-led businesses

Women’s Enterprise Scotland flags “serious” and “unfair” issue of women-led businesses continuing to face structural discrimination, saying legislation has failed to keep pace with societal chnge.

Urgent action is required to tackle the growing pension gender gap, with the issue of women’s pension pots falling well short of male peers’ being worsened by female entrepreneurs dipping into their savings amid a lack of access to business finance, according to a Scottish organisation fostering women in business.

Women’s Enterprise Scotland (WES), a community interest company that works to close the gender gap in enterprise, is now urging policy-makers to act immediately to tackle the growing pension disparity, including making funding available specifically for micro and small to medium-sized women-owned businesses. The call to action comes as WES analyses data from the pilot activity on its new crowdfunding platform, designed to help women business-owners raise capital.

The organisation cites the annual report from the Cross-Party Group (CPG) on Women in Enterprise convened by Michelle Thomson MSP, in which the structural inequalities affecting women’s pension provision proved a key 2023 theme.

WES cites a study showing that men accumulate in excess of £100,000 more in their pension pots compared to their female counterparts. Picture: PA.

Furthermore, WES says evidence presented by Scottish Widows has revealed that men accumulate in excess of £100,000 more in their pension pots compared to their female counterparts, adding that with the cost-of-living crisis acting to “significantly diminish” the value of retirement savings, the gap has worsened. Also cited is a recent report from Scottish Widows in November showing that men are on track for a retirement income nearly 40 per cent higher than that of women.

In addition, survey research by WES reinforced the well-publicised stumbling block of women business-owners finding access to finance a challenge, echoed by the British Business Bank recently stating that there had been no improvement in the 2 per cent share of venture capital funding received by female founders over the past decade.

WES has now said: “In such a constrained funding landscape, it is unsurprising women turn to their savings to capitalise their businesses. However, by diverting savings to support businesses, the funds available to contribute into a pension are reduced, a position made worse as the years roll by and pension under-provision, or no provision at all, accumulates.”

Brenda Santimano, chief executive and founder of HFL Holistic Financial Solutions, said: “There is an urgent need for targeted action to address the growing gender gap in pension provision for women business-owners. Legislation has failed to keep up with changes over the years, and many women are entirely unaware of the future pension implications from the financial and work choices they make today.”

Sophie Rooney says it is 'unfair that women still face such challenges in accessing finance for their businesses'. Picture: contributed.

Also commenting was Sophie Rooney, secretary of the Women in Enterprise CPG, who stated: “This is a serious problem. The data provided by Scottish Widows during our session on the gender gap in pension provision, backed by the experiences of Brenda Santimano, shows that urgent changes are required to address pension provision for women business-owners. It is unfair that women still face such challenges in accessing finance for their businesses and this situation undermines their ability to adequately provide for their retirement.”