Aegon report looks at causes of poor female financial wellbeing

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  • In the average household women are more likely to take responsibility for short-term money matters like groceries, home help costs and short-term saving goals – by contrast men are more likely to be responsible for long-term financial plans
  • This focus on short-term finances means many women simply don't find the time to build a clear picture of their future self or a financial plan to achieve their long-term goals hampering their financial wellbeing
  • It takes to age 55 before most women close the gap on men and have as clear an idea about what they want from the future
  • Aegon’s financial wellbeing index finds 42% of women are struggling with their financial wellbeing compared to 31% of men

Women are three times more likely to take responsibility for budgeting for groceries than men (51% vs 17% of men), according to pension and investment company Aegon*. The finding which forms part of its financial wellbeing index study**, is typical of the ‘gender splitting’ of household responsibilities which may negatively impact many women’s financial wellbeing.

In addition, women were also more likely to be responsible for what the household spends on children’s clothing (73% vs 8%), home help costs (27% vs 9%) and short-term savings (53% vs 33%). However, when it comes to long-term savings 61% of men said they were responsible compared to 36% of women. This gender division of responsibilities holds true even in male / female households where women are the main or equal breadwinners.

Overall, Aegon’s index finds 42% of women are struggling with their financial wellbeing compared to 31% of men. Similarly, only 12% of women are able to combine healthy finances and a positive money mindset, compared to 21% of men.

These findings are based on peoples’ responses to a range of questions measuring both their household wealth and the health of their money mindset. Mindset measures included how healthy the social comparison people make about their money are, their financial literacy, but crucially also factors such as whether they have a long-term financial plan, a clear picture of their future self and an idea of what makes them happy – both joy and purpose - now and in the future.

While women were just as likely as men to know what gives them joy and purpose, they scored lower on having a financial plan and a clear picture of their future self – 53% of women said they didn’t have a financial plan, compared to 45% of men. When asked how much thought they had given to their financial goals in life 28% of women said a lot, compared to 33% of men.

Linked to this was a marked division in the proportion of men and women who had a clear picture of their future selves. Women scored lower in every age group on this measure and took till age 55 to almost close the gap with men.

Proportion of men and women who say they have a concrete picture of their future self by age group

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Source: The Financial Wellbeing Index survey of 10,000 people,  Aegon UK, 2020.

Steven Cameron, Pensions Director at Aegon comments:

“Unless you know what your long-term financial goals are and have a plan to achieve them it can be difficult to have a truly healthy relationship with your money. Our research finds that in most mixed gender households, women are more likely to have lead responsibility for short-term budgeting and management of the household finances. These important tasks make up much of the outgoings for the average household, but this short-term focus may be depriving many women of the chance to think long-term about their finances. By contrast men are almost twice as likely to assume responsibility for long-term savings.

“We believe this is an important factor that contributes to women having lower financial wellbeing. We’d encourage those in long term relationships to try and build joint financial plans with a shared understanding of long-term goals. Doing so will give both partners a clear idea of what their shared and individual priorities are and mean everyone knows what they’re working towards. Getting a balance between good day to day budgeting and a long-term plan is a crucial ingredient of financial wellbeing and importantly could avoid many women suffering from poor financial wellbeing.”

Nikki Ramskill, The Female Money Doctor, comments:

”Aegon’s research is a vital step forward towards understanding why there are still huge gaps between women and men's finances. It has put into numbers the reason why many women struggle with long-term thinking for their finances and planning for the future. This is something I see a lot in my dual capacity as a money coach for women and a GP. All too often, the division of money in a relationship becomes linked to"traditional" roles like child-caring and budgeting for food and household bills, leaving no room for long-term saving, investing and planning for retirement. I see the burn out and ill health that comes with the daily burden of trying to"do it all", so it is not surprising that there is little energy left for thinking about the future.

“Couple this with a still-male dominated investing industry, and long gaps in pension contributions, and it's no wonder that women are not reaching their fullest potential and lack confidence when it comes to their long-term financial health. Our money mindset is so important when it comes to feeling in control of our finances. We don't talk about money enough, so I welcome this research to shine a light on what goes on behind closed doors to help people understand more about themselves and their wealth.”

 

References

*Aegon surveyed 962 adults from the Aegon Feedback Community between 6 July - 20 July, 2020

**The Financial Wellbeing Index was based on a representative survey of 10,000 people across a range of sectors, company sizes and job roles, carried out by Aegon UK, 2020.

 

Further information

Stephanie Melrose,

PR Manager

stephanie.melrose@aegon.co.uk

Mob: 07740897621

 

Notes to Editors

  • In the UK, Aegon offers retirement, workplace savings and protection solutions to over three million customers. Aegon employs around 2000 people in the UK and together with a further 800 people employed by Atos, we serve the needs of our customers. More information: www.aegon.co.uk
  • Aegon’s roots go back more than 175 years – to the first half of the nineteenth century. Since then, Aegon has grown into an international company, with businesses in the Americas, Europe and Asia. Today, Aegon is one of the world’s leading financial services organisations, providing life insurance, pensions and asset management. Aegon’s purpose is to help people achieve a lifetime of financial security. More information on www.aegon.com
  • Figures correct, January 2021
  • Dr Nikki, also known as The Female Money Doctor, is a GP turned money coach and has over 10 years of experience as an NHS doctor and women’s health specialist. After years of mismanaging her own finances and then getting them back on track, she saw how poor money management was leading to physical and mental health problems for her patients and colleagues too. This sparked a desire to do something about it. She believes that we cannot be truly healthy while a money nightmare is going on in the background. Dr Nikki now helps women from all over the world to improve their mental health and well-being through getting organised with their finances and building wealth for the future they truly deserve.