Why women need to take note
However, we really must sit up and take note when it comes to our finances and investing. Research from The WealthiHer Network Report 2019 predicts that by 2025 over 60% of UK wealth will be in the hands of women, yet it also shows that 70% of women are not engaging with finance.
The gender pay gap is well publicised but there are also other areas to consider. The ‘Motherhood Penalty’ shows that working mothers earn 20% less than fathers ten years after the birth of their first child (Social Market Foundation Research) and very few new parents opt to take shared parental leave. This leads onto the ‘Childcare Penalty’ with the ONS showing that in couples, 65% of mothers are in work compared with 93% of fathers. It is little wonder that many parents don’t choose to work part-time with the absorbent cost of childcare, but it is disappointing that it is the women that tend to put their career second. And if that wasn’t enough, there is also the ‘Good Daughter Penalty’ with many of the informal caring roles taken on in families being done by women.
Women tend to be more cautious when it comes to investing and less willing to take risks with their finances. This coupled with women often earning a lower salary means we often end up with less in the pot! If we then sit on this pot and keep it in cash, it isn’t working as hard as it should be or needs to be. Given that women overall tend to live longer, this is particularly important to grow our assets when it comes to pensions, that is if you don’t want to have to survive retirement on the state pension of £179.60 per week. That certainly won’t keep you in Jimmy Choo’s!
Do you have a financial plan?
I am aware that so far this blog has sounded somewhat negative but there is a way out of this which is to start taking control of your finances. This can be achieved by doing your own research and increasing your financial knowledge, therefore improving your financial wellbeing, or alternatively work with a financial adviser and/or investment manager.