YOUR MONEY: Finance sector fails Britain's better half

WOMEN may make up 51 per cent of the population, but you would be hard-pushed to guess this from the way the financial services industry has tended to treat them, both as customers and employees.

The traditional images of the industry - the bowler-hatted City gent, the yuppie dealer in striped braces - may not all seem ones to aspire to, but they are unquestionably male. Similarly, the industry's products have been sold on the assumption that women are financially dependent on their partners and neither need nor can understand much about money. A recent survey by Fiona Price & Partners, which specialises in independent financial advice for women, found that seven in 10 of its clientsthought the financial services sector had an "appalling attitude to women".

These attitudes are changing. In the City, women now occupy a number of key positions in the firms running the huge pension and investment funds. Anne McMeehan, group marketing director for fund managers Framlington, believes that "in general, the City is fair".

But this fair-mindedness is not always evident outside the Square Mile. As Helen Bath, of Cheltenham-based independent advisers Womanwise, puts it: "A lot of people are trying to climb aboard the bandwagon of selling financial services to women, but it's only an enlightened few companies who are making genuine, useful changes."

The slow pace of change may reflect the fact that men still dominate the upper management echelons of most sectors of the industry. A spokeswoman for the banking union, Bifu, calls it the pyramid effect. While up to two-thirds of bank employees are women, their numbers "waste away as you go up the management hierarchy, leaving fewer than 5 per cent at the most senior level".

This disparity has been accentuated by the trend over the past few years to downsize banks and other financial services companies. A report published on the weekend by the Equal Opportunities Commission points out that although employees now have far more opportunities for flexible part-time working, these new jobs are mainly low-pay and low-status ones, offering fewer chances for training or for promotion. They are also done mainly by women. Two in five women of working age are in part-time jobs. The commission says that even at management level, women are still losing out: "Changes such as delayering [stripping out management levels] have left many women working as managers but without the same status or pay as men."

The factors which affect women in employment - part-time and low-paid work, the knock-on effects of career breaks, and prejudice - also have an effect on them as consumers of financial services.

Take, for example, pensions. Women live longer than men. Their average life expectancy is 79, against 72 for men. This is reflected in the differing rates men and women pay for annuities, which give you a guaranteed income for life in return for a lump sum payment from your pension. Women need to build up much bigger pension funds to get equivalent retirement income to men at the same level. This is compounded by the effects of career breaks, which mean a woman has to contribute up to a half as much again as a man for the same pension fund.

In practice, however, women save far less for retirement than men do. Almost 5 million working women are not contributing to a pension scheme. Even those who do save, but take a career break, often lose out because many personal pension plans don't allow policy holders to stop paying premiums for a while.

The net effect of this is the expectation of disproportionate financial hardship for a lot of women. Already, four times more women than men claim income support in retirement, and this figure is set to rise once the state retirement age for women increases from 60 to 65 early next century. But a recent survey by insurer Gan Life & Pensions found that more than a third of women under the age of 45 were unaware of this change.

The Back to Basics Tory answer to this conundrum might be that married women could and should rely on their husbands to support them financially.

This view perhaps explains why a recent survey by insurer Norwich Union found that two in five women are not making financial plans for the future because they think this would upset their partners. But more than one in three marriages now ends in divorce. Pending a forthcoming change in the law, divorce usually leaves women (and men) with no claim on their partner's pension scheme.

There are clear signs though that younger women are becoming increasingly financially independent. This reflects changing social patterns and the fact that women have increasing financial muscle as the pay gap with men slowly closes.

The proportion of mortgages held solely by women in Britain, for example, more than doubled to 17 per cent between 1983 and 1994, according to Government statistics. Similar trends are evident with bank accounts and plastic cards, although some types of investments are still male-dominated. Women account for fewer than one in ten of respondents to investment trust advertising, for example, according to the trust trade body.

The financial services industry is now cottoning on to the "new" market that women represent. Some of the resulting marketing effort is founded on gimmicks; plans which insurers say are designed for women, but which are really nothing of the sort, according to an adviser with Fiona Price & Partners.

Nevertheless, the fact that the industry is waking up to the needs of the majority of the population could bring more significant changes in the future.