The coronavirus crisis will heighten financial inequality, anxieties for those with existing money worries and will inevitably bring others into a period of financial difficulty. With the existing gender pay and savings imbalances, it is an inescapable fact that women are entering the current period of financial uncertainty in a less financially robust state than their male co-workers.
The gender pay gap is not a result of lack of parity of pay. There are more women in lower-paid or part-time roles, many of whom work around childcare or have taken career gaps to raise a family, so are paid less and have lower savings – to the detriment of their financial wellbeing. Close Brothers’ findings also show that women are significantly less confident about the savings options available and how to choose what’s best for them.
Women’s financial health may well be different from men’s. However, COVID-19 will inevitably cause more employees, both male and female, to worry about money, so financial inequality needs to be tackled head-on. With an increased focus on communications and as people have to find new ways to occupy their time while at home, now is a good time to reach out and help employees to improve their financial health and confidence for the immediate, short, medium, and long-term.
Close Brothers have compiled some key data on financial inequality from previous reports highlighting the scale of the challenge facing women across the UK as households struggle with the financial worry of COVID-19.
Financial Wellbeing gap
• Women scored below men in all seven areas of financial wellbeing*, meaning that they enter the current period of financial uncertainty at a significant disadvantage to their male co-workers
• A quarter of women (26%) already admitted to struggling to make their money last until payday* before the coronavirus outbreak. This was the case for only 13% of their male co-workers.
• Women are twice as likely to worry about meeting their day-to-day living costs than their male counterparts. The figure among female employees is 16% compared to just 7% among men.
• 48% of women said that they feel unprepared for retirement compared to 25% of men*. Also, a third (33%) of women say that they are not confident they will be able to achieve their long-term savings goals, nearly twice that of their male co-workers (19%). This is likely to shift further as the impact of the coronavirus shutdown becomes clear.
Saving pot disparity
• Female workers are twice as likely to have less than £5,000 in workplace savings compared to their male counterparts #
• Male workers are saving 40% more over a year; £3,660 vs £2,652 #
• This savings gap is a significant contributor to perpetuating the gender divide and
• However, income is not the only relevant factor in savings activity. Financial confidence also plays a role, with only a third (36%) of women feeling confident about choosing the right financial product compared to 45% of men. It is here that comprehensive financial education can have a real impact on
* Surveys conducted among 1,003 employers with 200 or more employees, and 5,003 employees from companies with 200 or more employees. The research was carried out on behalf of Close Brothers Asset Management by Opinium between the dates of 29 October 2018 and 11 November 2018.
#The data is based on surveys conducted amongst 1,000 employers with 200 or more employees and 2,009 employees from companies with 200 or more employees. The research was carried out on behalf of Close Brothers Asset Management by Opinium between the dates of 16 and 22 August 2017.