If you are a female of the species, you will already know that the financial odds are stacked against you compared to your male counterparts. In comparison to men women earn less, have fewer assets and savings, lack financial confidence, and live with both short and long term financial insecurity, often struggling in retirement.
There are a ton of reasons which explain why far more women than men are living on the financial edge including the gender pay gap, under-representation in high paying careers particularly in STEM fields (Science, Technology, Engineering and Mathematics), and algorithmic bias. Yes, even the machines are against women, partly because it is largely men who programmed them. According to the report ‘in 2018 Amazon had to terminate its hiring algorithm after it was revealed to penalise CVs that contained the word ‘women.’
Individual women have little control over these things but there are some factors affecting women’s financial precariousness which they do have some control over. Here are some findings of a recent investigation in the UK by think tank RSA in conjunction with the Women’s Budget Group, an independent network of campaigners for gender equality:
- 43% of women report that they would struggle to pay an unexpected bill of £100 (compared to 30% of men)
- 38% of women feel that their job does not provide them with enough income for a decent standard of living (compared to 24% of men)
- 54% of women didn’t feel they would have enough in savings to maintain a decent standard of living in retirement (compared to 37% of men)
Let’s look at those and highlight some ways that women can empower themselves financially.
- 43% of women report that they would struggle to pay an unexpected bill of £100
Being unable to pay a bill of just £100 suggests a high level of financial precariousness which is likely to engender stress and affect mental health. The key to dealing with that is establishing healthy financial habits such as budgeting, paying off debt and saving. It may not be easy if income is low but taking a good hard look at how income is spent could help pinpoint areas where small savings can be made. And small savings over several months add up. Having an emergency fund banked and easily accessible for unexpected bills gives a great sense of security and peace of mind, relieving stress. If you don’t have one, start saving now.
- 38% of women feel that their job does not provide them with enough income for a decent standard of living
We’re not denying that many women are in low-paid work which makes it difficult to make ends meet however research suggests that women are far less likely than men to ask for a pay rise. Two out of three men are comfortable with asking for a rise compared to just 40% of women. If you don’t ask you don’t get so women need to get better at negotiating for themselves. And imagine what could be achieved if all women systematically did that? If you need some inspiration, look to Iceland. On 24th October 1975 90% of the female population of Iceland went on professional and domestic strike in the Woman’s Day Off to show just how difficult life would be without them. It triggered some wide-ranging changes to even out gender imbalance and Iceland has topped the World Economic Forum’s survey for gender equality nine years in a row. Pluck up some courage and go ask your boss for a raise – what’s the worst that can happen?
- 54% of women didn’t feel they would have enough in savings to maintain a decent standard of living in retirement
There are many reasons why women don’t save for retirement. They have less income to play with in the first place, they tend to prioritise short-term demands when it comes to disposable income, particularly family needs, they are more likely to take career breaks to bring up children and they often lack the financial knowledge and confidence to start saving for themselves. But women really need to start prioritising their long term financial security and start saving into a pension fund. Yet again, it comes down to strict money management to free up funds for saving, even if it’s only a small amount each month. And women can educate themselves to give themselves confidence to understand the basic principles behind saving and investing. There is a wealth of information online – including on Infinity’s website and blog – or seek the help of a trustworthy financial adviser. Whatever your age, start investing for retirement as soon as you can.
Infinity is passionate about helping individuals take control of their financial futures. We believe doing so can transform lives. If you’d like help transforming yours to stop living on the financial edge, contact us for a free, no-obligation consultation.
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