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More than half of UK women do not feel financially self-sufficient, study finds

25 April 2022

Fidelity International’s second ‘Global Women and Money’ study finds that UK women feel more financially stable than those in Europe, but less than their Asian counterparts.

By Eve Maddock-Jones,

Senior reporter, Trustnet

UK women are among the least likely to feel financially independent, a new study by Fidelity International has revealed.

Fidelity’s annual ‘Global Women and Money’ study found that out of more than 6,000 participants from the UK, Germany, Hong Kong, Japan, Singapore, China and Taiwan, 55% of those in the UK did not feel they were financially self-supporting.

Among the other regions only 33% of German participants said that they were comfortably self-financing, with 38% in Japan and 46% in Singapore. China and Taiwan showed the highest levels of financial independence among women, at 69% and 72%, respectively.

Fidelity analysts said that many women in the UK were “facing significant financial uncertainty”.

Among this group, only 32% felt confident about reaching their financial goals and just 28% said that they were free from money-related worries.

Almost a fifth (19%) said that they did not think that they could easily support either themselves or their family and only a third said that they would be able to live comfortably in retirement.

Among the 45% that did feel that they had more financial freedom 62% attributed this to having enough income to cover their outgoings and just over half said it was being free from debt.

What they all shared though was the notion that “their finances provide them with the ability to shape their own lives, highlighting the importance of financial independence in enabling and empowering women to make decisions”, according to the study.

Maike Currie, investment director at Fidelity International, said that “female financial independence is fundamental.

“Having control over our finances allows us to adapt to changing circumstances, tackling challenges head-on and seizing opportunities to shape the lives we want. Yet less than half of UK women feel financially independent.”

Kim Uzzell, a former stockbroker and current financial coach, said it was important for everyone, not just women, to “realise that if they don't do anything with their money now, it's not only now that they're doing themselves out of choices, but for the rest of their lives they're going to have less choice.”

Uzzell said that a big part of this problem was not just women inherently thinking that “they’re not good with money”, but when they do try and break that mindset and speak to an adviser it is a very male-orientated industry, who tend to view finances through a different lens.

She said women think about money with different feelings, often focusing on how it will affect their children and grandchildren rather than themselves.

“But the person advising them, usually a man, may be giving incredibly good financial advice but it might not always in alignment with that emotional element and until that is addressed the fear around investing remains”.

Uzzell herself suffered with debt and a poor relationship with money, stemming from her years working in the finance industry when there was a big “keeping up with the Joneses culture”.

“Myself and my husband had an equally bad money mindset, I wasn’t educated on it”.

Looking at the results of the study, Currie said that a string of factors had contributed to women generally feeling less financially stable, including “low-income levels, fears about job security and the compromise many women are forced to make between work and caring responsibilities,” which are all named as barriers to achieving financial independence.

The rising cost of living and the disparity between male and female income was one of the main challenges women trying to reach financial independence faced today, according to Currie.

The UK is now dealing with a 7% inflation rate, the highest in 30 years, and it is expected to rise higher by the end of 2022. The cost of living has also been driven up by long-standing supply chain issues, initiated during the pandemic but worsened by the war in Ukraine.

The director said that while all households share concerns about these issues “women’s finances are likely to bear the brunt of this burden.

“It is a well-recognised fact that women spend more of their money on their children, pay more for the things they consume and need (known as the ‘pink tax’) and play a larger role in keeping the household running. With these immediate obligations and pressures front of mind, the opportunity for women to plan for the future and build up their long-term savings is often ignored or pushed to the side.”

Emma-Lou Montgomery, associate director at Fidelity International, said there were some key things that women can do to move to a more positive position.

“In today’s tougher financial climate, women need to ensure they reassess their current financial health, looking at how they cover day-to-day costs and where they can take steps to gradually build a savings safety net for the future,” she said.

She said that positive steps had been taken to educate everyone on this issue and communicate the importance of long-term savings, but the past two years of intense, economic volatility “seriously threatens to derail this progress and instead widen the gaps further”.

Montgomery said: “Everyone should aim to have some savings to fall-back on, something that’s increasingly more difficult to accrue in the current climate. Having a separate fund, no matter how small, offers women (and men) the ability to make choices and change their lifestyle if needed.”

Currie agreed that securing female financial freedom “has never been more important” and that “we need to empower women when it comes to managing their money”, by educating them on budgeting, investments and finance, as well as “increased help for those with caring responsibilities”.

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