5 Tips for Women’s Finances

Posted on: 19th December 2017 in Finance

Is it important for women to think differently from men about their finances? Below we review some juicy stats – what’s your verdict? It seems that women face different financial challenges from men in 5 key areas:

1. Income and Career

While in the UK, women in full-time employment earn 9.4% less than men (Office for national statistics), in the UAE recent studies, suggest that the situation is different.  Research in January 2017 conducted by Universum Global revealed that women in the UAE can expect to earn 99% of a male counterpart’s salary. But whether the gender pay gap is actually experienced or simply perceived, it is clear that women navigate different obstacles in their career paths that can leave them feeling less in control of their finances.

2. Retirement and the Pensions Gap

Insurance company Zurich’s recent calculations found that employers contribute an average 0.8% less to a female employee’s pension fund than a male employee’s.  This means that on average, women end up with £47,000 less in their pension pot and a 25% lower income in their first year of retirement.  Given that on average women outlive men, there is a substantial gender divide when it comes to pensions savings.

3. Investing vs Saving

Latest ISA statistics from the HMRC show that women are better savers than men. Whether this reflects a lack of confidence in investing (only 17% of women confident compared with 31% of men according to a YouGov poll) or a more historical, gendered relationship with saving, women are far less likely to take risks with their money.  However, caution can be turned to an advantage, as Steve Cronin (wiseuae.com) points out “studies show again and again that women outperform men in personal investing in the long run.” Changing your relationship with investing can impact your accumulation potential. Your Holborn Assets advisor (whether male or female!) can help you discover how.

 4. Focus on your own needs

Women still tend to be the primary caregivers in a family and this can have huge consequences on their finances.  Whether this takes the form of a career break to have children or care for a family member, or the need for more flexible working hours, women’s careers and finances are often affected by their roles outside of the workplace.  Recognising your own needs can be the first step in taking control of your finances.

 5. Plan independently

Traditionally, women have given over guardianship of their financial futures to their husbands and partners, but with more marriages ending in divorce year on year (Office for National Statistics), it is becoming ever more necessary for women to tackle their financial futures alone.  This can be a daunting prospect, but with the advice of your financial advisor it can also be a liberating and empowering transition.

Verdict

The different factors affecting women’s finances do not have to translate into disadvantages! On the contrary, women are better placed than ever before to take the reins of their financial futures with the right financial advice.