New research from Close Brothers’ Workplace Financial Wellbeing Services digs into the financial wellbeing of the UK’s workforce, revealing that the financial turmoil in recent years has not hit evenly, creating real vulnerabilities for certain segments of the population.
Within the workplace, this imbalance is particularly apparent between the genders. Women are consistently more financially vulnerable than men, with an overall financial wellbeing index score of 54 compared to 60 for men.
Financial worries prevail amongst women
The research found that female members of the workforce are unhappier with the state of their finances in general – 32% for women versus 25% for men – and that they are more likely to worry about their finances – 42% women versus 32% of men. Over half of women say these money worries make them anxious (52% versus 36% of men).
In every area of day-to-day finances, women also show more distress. Two in five (40%) are worried about rising mortgage or rental costs, compared to 27% of men. Similarly, 46% worry about not being able to meet day-to-day living costs (vs 30% of men), while one in three (31%) of women worry they would not be able to cope financially if they were to fall ill, compared to 20% of men.
The research shows there are specific areas of vulnerability for women. Nearly one in two (42%) fear not being able to afford to retire, compared to 29% of men, while 35% are struggling to save for future goals (compared to just 21% of men). One in three (33%) women feel financially unprepared to withstand unexpected costs if they were to suffer a significant reduction in their income.
Long-term financial goals appear more out of reach for women
When asked about achieving short-term savings goals both men and women display similar levels of confidence, but this starts to diverge when looking at medium- and long-term savings goals; 19% of men say they don’t feel confident they will achieve their medium-term savings goals, compared to 26% of women. For one major long-term savings goal that’s on everyone’s agenda – retirement, the gap is stark. Almost half (48%) of women are concerned they won’t be able to afford to retire when they want, compared to just 31% of men.
What do women need?
Tellingly, the research revealed that men are more likely to know how to take advantage of all tax allowances and reliefs available such as Marriage Allowance, annual ISA Allowance, Dividend Allowance or Interest Allowance. Conversely, over half of women (56%) admit they don’t know how to use them or aren’t even aware of them. This indicates a strong need for financial education within the workplace.
In fact, over one in three women (37%) say that receiving financial advice would improve their financial wellbeing. Furthermore, there are specific benefits that women believe would further improve financial wellbeing such as mortgage advice (24%), holiday sellback (31%) and employee shopping discount scheme (37%). Unfortunately, many companies are lagging behind when it comes to the benefits they have on offer. Only 15% of employers offer financial advice, 17% offer mortgage advice, and 26% offer holiday sellback.
Jeanette Makings, Head of Workplace Financial Wellbeing comments: “Even though companies have made great strides in focusing on wellbeing plans, many still do not give financial wellbeing the same attention as other areas of wellbeing, meaning financial health lags behind. This lack of support affects all employees but it is even more stark for women. While we strive to balance things like equal representation on leadership roles on UK boards, and gender pay gap reporting, we are missing a fundamental and widespread gap in financial health. Women are lagging far behind men in terms of average salaries, pension pots and other savings. Whilst many of the reasons for this gap are well known – more women taking career gaps to raise families, more returning to work in part-time roles and more working in lower paid roles, with targeted financial education, guidance and advice this gap can be narrowed.
“Recognising differing priorities and needs within a diverse workforce is key to adapting financial wellbeing programmes, thus ensuring there is real support to those employees that are most vulnerable, including women. This will positively impact women themselves, improve overall financial wellbeing and increase loyalty, engagement and business performance.”
