Women are much more likely to focus on short-term savings to the detriment of their long-term financial wellbeing, new research from Aegon has discovered.
The findings of its financial wellbeing index study showed women are three times more likely to take responsibility for budgeting groceries than men (51% vs 17% of men). The gender division extends to children’s clothing costs (73% vs 8%), home help costs (27% vs 9%) and short-term savings (53% vs 33%).
In stark contrast, nearly two thirds (61%) of men are responsible for long-term savings compared to just over a third (36%) of women. Over half (53%) of women admitted to not having a financial plan, compared to 45% of men, despite 28% of female respondents saying they had given a lot of thought to their financial goals.
Overall, Aegon’s index found 42% of women struggle with their financial wellbeing versus 31% of men. Similarly, only 12% of women are able to combine healthy finances and a positive money mindset, compared to 21% of men.
Steven Cameron, pensions director at Aegon, said: “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. This short-term focus may be depriving many women of the chance to think long-term about their finances.
“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, commented: “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. 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.”
