When it comes to money, women are often worse off compared to their male counterparts. Whether we are talking about earnings, savings, confidence or capability, men often come up trumps.
Of course, the most obvious statistic that demonstrates how women find themselves worse off when it comes to money is the gender pay gap. It is recognised globally as the gap between the average pay for a man and a woman. In the UK, men currently earn a mean average of 17.4% more than women, when taking all types of workers into account.
The gender pay gap could also feed into the reasons why women often fall behind men in financial knowledge and confidence. The British Household Panel Survey found that women’s savings and debt level are much more likely to be affected negatively by life transitions, and also said savings recover much slower than men’s. Women’s economic wellbeing is also more likely to be negatively affected when going through a divorce.
When it comes to financial literacy and capability, women yet again draw the short straw. A 2012 YouGov survey found that only 58% of women claimed a very good understanding of financial products and services, compared to 72% of men. According to the OECD, in most countries women have much lower financial knowledge than men.
Whilst this points towards men having better financial understanding, when asked questions on financial capability, women were also much more likely to respond ‘don’t know’ compared to men. Men were also more likely to overstate their understanding of financial products. Therefore, confidence is also a barrier to women’s financial knowledge, potentially stopping them from asking questions on products and taking risks when it comes to income and savings.
The stereotypes surrounding women and money can also stop women from accessing the same level of investment options as men. Research from the UK Business Angels Association found that 96% of women said their financial advisors failed to mention angel investing as an investment option, sticking to ‘safe’ options for them. So we can also see how beliefs upheld by those in the finance industry continue to push women away from the kinds of investment and savings options that men have.
Despite this failure to engage and include women in financial capability, many are still tasked with keeping track of finances in their households. The ONS found that women are statistically much more likely to be in control of the household finances, despite also being more likely to be uninformed about products and services, as well as less financially confident. This is referred to as the ‘Invisible Workload’ for women as they are often the ones who manage day-to-day finances, amongst other typical household chores.
The evidence shows that women are less financial confident and capable, more affected by big life changes and ultimately earn less than men. Yet they are also given the burden of managing day-to-day finances in their homes.
This International Women’s Day, The Money Charity is encouraging women to talk more openly about their finances, and for everyone to challenge the norms and stereotypes which leave a lot of women at a disadvantage. Tell those in the industry what you think needs to change, support financial education in schools and speak openly about your experiences with money. In doing so, we can all take a step closer to gender equality when it comes to finances.