Women must grasp reins to remedy poorer financial hand

WHY do women get such a raw financial deal? The causes are known, down in part to biology because they tend to take on the main childcare provision, often drastically reducing their earnings capacity in the process, but also stubborn and ingrained issues like pay and pensions gaps along with a lack of self-confidence.

Now it seems women get the short straw during periods of recession and financial uncertainty too.

Research for Quilter, gathered by YouGov, revealed that over a third (36%) of women would not be able to afford their everyday expenses should the UK enter a recession, compared with just a quarter (26%) of men.

Around 31% of women said they were in a worse position financially than last year.

Just 25% of men felt the same way. Angela Davy-Makwana, financial planning consultant at Quilter, commented: “The UK has so far narrowly avoided a recession, but we are not out of the woods yet.

“Though it is positive that the Government is exploring the impact the cost-of-living crisis has had on women, more must be done to ensure that women feel financially secure.

“For those under strain, it is important to act sooner rather than later when it comes to assessing your finances and taking steps to improve them.

“Making small changes, such as creating a budget to help you get on top of things or putting more money aside each month wherever possible to build up your emergency rainy day fund can make a real difference, ensuring you are aware of your spending and cutting back where you can.”

Fidelity International noted: “With 80% of companies still paying men more than women, the gender pay gap doesn’t appear to be closing – not quickly enough anyway. And that’s not all.

“The difference in pension income for women compared to men is a whopping 40.5%.

“Research shows women are more likely to reduce their working hours after becoming a parent.

“Women are more likely to become carers and provide more hours of unpaid care compared to their male counterparts.

“And more women than men provide high intensity care at ages when they would expect to be in paid work. This inevitably impacts women’s financial stability, and they may well work fewer hours and have less in their pension.

“A higher proportion of women take up jobs that offer less financial reward, such as administration. Many high-paying sectors are disproportionately made up of male workers, such as IT.

“More women also work parttime. And women are still less likely to progress up the career ladder into high-paying senior roles.

“Not surprisingly, lower wages throughout a woman’s lifetime are having a big effect on women’s pensions. And as private pensions depend on your earnings, it follows that you’ll be saving less.”

In the UK, women are almost twice as likely – 1.8 times – to be in insecure work than men, according to research by the Work Foundation at Lancaster University.

Even in later life, women are more likely to work part-time or retire early to look after elderly relatives – or because they’re suffering from restrictive menopausal symptoms.

According to Unbiased, not taking control of financial matters is a real issue for women.

“Not only are they missing out on opportunities to get their money working harder for them, they also risk losing a financial safety net if life doesn’t go according to plan (divorce, redundancy, bereavement) and face a cash-strapped retirement.”

Yet, by 2025, more than 60% of the UK’s wealth is expected to be in the hands of women.

Along with systemic change, time for them to be more proactive perhaps.