Czech women face significant pay gap impacting their pensions

Pay inequality remains a pressing issue in the Czech Republic, with long-term consequences for women’s lives. Czech women earn, on average, 18% less than men, which translates to CZK 8,400 lower monthly wages. This disparity affects not only their current financial situation but also their pensions, which are on average CZK 3,271 lower than those of men.

According to Eurostat, the Czech Republic has the third-largest pay gap in the EU at 17.9%,following Estonia (21.3%) and Luxembourg, which has the smallest gap (1.3%). Slovak women face a similar situation, with a 17.7% wage difference compared to men.

“Lower earnings mean limited opportunities for women.This impacts not only their current financial standing but also their future pensions, which are determined by contributions to social insurance,” says Lukáš Raška, an analyst at the investment platform Portu. In 2022, Czech women earned an average of CZK 8,397 less per month than men, and their pensions were CZK 3,271 lower.

Despite these challenges, Czech women save and invest responsibly, preparing for a financially secure future. While women’s investment contributions amount to 73% of men’s, Slovak women manage to save even more – up to 84% of men’s contributions, according to Portu data.

Women as responsible investors

Although women often have less knowledge about investing (as shown by the Investment Literacy Index), their approach is more cautious and long-term oriented, which proves beneficial. A 2021 study by U.S.-based Fidelity found that women’s investment portfolios outperformed men’s by 0.4% annually.

This trend is confirmed by Portu’s data, where women account for 38% of clients and are more likely to choose socially responsible investments (ESG portfolios). In the Czech Republic, twice as many women as men invest in ESG options.

How to Improve Financial Security?

Securing a comfortable retirement is crucial, particularly given the earnings gap. Women should not underestimate the importance of preparing for their financial future. Setting aside funds for retirement is essential, and the state provides incentives such as the newly introduced Long-Term InvestmentProduct (DIP). This product offers tax deductions of up to CZK 48,000 annually, potentially saving up to CZK 7,200 per year.

Pay inequality is more than just a number – it directly impacts the quality of life for women. Addressing this issue requires both policy changes and a shift in attitudes toward saving and financial planning. Women, with their responsibility and patience, can be an inspiration in this regard.