Gender inequality found in all areas of financial wellbeing

Gender inequality found in all areas of financial wellbeing

Women fare worse than men across all areas of financial wellbeing, according to research from Close Brothers.

The firm's newly developed Financial Wellbeing Index, published yesterday (April 3), scored employees' wellbeing in seven areas of financial health and found women scored an average of 48.1 versus men’s 58.3.

In particular, female employees scored less than men across the areas budgeting and planning, debt, protection, savings and investments, retirement, properties and mortgages and tax.

The index was based on surveys conducted among 1,003 employers with 200 or more employees and 5,003 employees from companies with 200 or more employees in October and November 2018.

Close Brothers worked with psychologist and wellbeing expert Professor Cary Cooper to examine how financial wellbeing was affected by the gender pay gap.

According to the Office for National Statistics gender pay gap report from October 2018 the pay gap currently stands at 8.6 per cent for full-time workers in the UK.

According to Close Brothers the effect of this was that women were twice as likely as men to worry about meeting day-to-day living costs, at 16 per cent compared with 7 per cent. Also, a quarter of women admitted to struggling to make their money last until payday.

Female employees also trailed behind in terms of long-term money matters and confidence in financial decision making. 

While 75 percent of men felt prepared for retirement, nearly half of the women surveyed didn’t feel they had the resources required to prepare for their later years and they were less confident they would reach their long-term saving goals than men.

According to Close Brothers this was borne out in the amount men and women had accumulated in their pension pots. 

Earlier research from the firm had shown the average amount in a woman’s workplace pension scheme was less than half of the amount their male colleagues had achieved — at £53,000 for women versus £120,000 for men.

Moves have been made in the finance industry to improve the representation of women in finance. In November of last year, the Treasury’s Women in Finance charter reached 300 signatures.

Jeanette Makings, head of financial education at Close Brothers, said: "Progress is being made, but the stark gender imbalance in financial wellbeing is a reminder of the scale of the challenge that still faces female employees and their employers. 

"With more women in lower paid roles, women are being paid less and therefore saving less, to the detriment of their financial wellbeing. But it is not the only underlying cause.

"The pressures and financial circumstances of female employees are often different to those of their male counterparts, so the level and focus of financial education on offer needs to reflect that."

But Ms Makings said the issues were solvable.

"Once the key pinch points for financial wellbeing have been identified, employers should be better prepared to provide tailored strategies to improve women’s financial health and confidence."