New research from the ONS has warned that at age 50, 17.9% of women were economically inactive, compared with 9.6% of men. This rises to 58.6% of women by the age of 64, compared to 44.9% of men.1 A number of life stages and family commitments can effect women’s careers, earning potential and therefore their financial resilience and preparedness in later life. The growing opportunity for employees to work from home rather than having to exit the workforce altogether could provide a positive opportunity for older workers, especially women. However, for now women and their finances continue to be adversely affected meaning that women should consider their current financial situation and ensure they have an appropriate plan in place with the right level of protection for their individual situation.
MetLife conducted research into women’s financial resilience and found:
- One in five (19%) UK adults say they wouldn’t be able to make ends meet without the help of a loan or credit card
- Just 23% of women would be financially resilient if they experienced a loss of income, nearly half the rate of men (39%)
- Women were more likely to feel resilient if they could rely on the help of a family member or partner financially (33% vs 25%)
- Of those that said they would not be able to make ends meet, women were again more likely than men to struggle financially, 23% of women said they wouldn’t be financially resilient, compared to 15% of men
Rich Horner, Head of Individual Protection at MetLife, shares three tips to help women feel more financially secure
- Create a Budget
Setting and then maintaining a budget- be it weekly or monthly- is fundamental to understanding your spending capacity and ensuring you keep track of your current and future outgoings. A budget allows you to put aside saving towards a long-term goal, helps avoid overspending and prepares you for financial emergencies. If your bank does not have a spending tracker, check out budget tracking apps like Money Dashboard, Yolt or Plum to get you on track.
- Saving to Spend
A savings plan not only offers a financial safety net in the event of a crisis, it also helps steer towards a long-term goal. With more women than men adversely affected during the pandemic, women were forced to re-evaluate their financial situation, as many grappled with furlough, job losses, a decreased income, and increased hardship. Creating a savings plan can help women financially plan for life events such as starting a family or buying a house.
- Look into Insurance
In what has been a very uncertain time, our research found that 16% of people cite having a reduced income and having to dip into savings as a major concern for the next six months. Feelings of anxiety when it comes to money can be a good motivator for people to seek extra assistance, as nobody wants to have to worry about their long-term finances.
For peace of mind, a good place to start is putting protection in place to cover larger monthly outgoings such as mortgage payments for homeowners. At a time when house prices are extraordinarily high and financial stability is low, it’s important to plan for every eventuality.
Rich Horner, Head of Individual Protection at MetLife, comments: “Many women have been forced to face their financial fears in the wake of the pandemic. Events have reminded us of the importance of having a plan in place. “We need to support and encourage women to review what solutions exist to help protect them financially not just in the immediate future but also the longer-term. Financial protection – a safety net that in cases such as illness, time off work or an accident– can make a real difference. Ultimately, it’s important that people plan today to help their future selves to feel and become, financially resilient.”