Working women ‘14 days away from the breadline’
The cost-of-living concerns could worsen the existing gender pay gap and long-term savings inequalities, according to financial services firm Legal & General.
While the average working woman has comparable debts to men (£558 vs £665), they have significantly less set aside in savings and investments (£1,801 vs. £3,214).
With a daily expenditure of £90, calculations show that women would only be able to fund their household spending for two weeks with no income. On average, women overestimate their financial resilience, assuming they are 60 days from the breadline; this is compared to men who assume they have 90 days.
Legal & General found that women are considerably more likely to view the cost-of-living crisis as a ‘constant source of worry’ (78% vs 68% of men) and therefore take action to address it. Women are much more likely to be cutting back on luxuries (86% vs 76% of men) and reducing essential spending (72% vs 65% of men).
Why are working women closer to the breadline?
Legal & General said that, on average, the working women it surveyed had a lower median annual personal income than men (£23,245 vs. £31,070).
This could be down to a number of reasons such as the gender pay gap which stood at 7.9% in 2021, up from 7% in 2020.
Working women are significantly more likely to be in part-time employment compared to men (31% vs 11% of men surveyed), with the expectation of domestic and caring responsibilities often placed on women’s shoulders.
Bernie Hickman, CEO of retail at Legal & General, said: “Throughout their lives, women face a number of challenges that can place them at a financial disadvantage compared to their male counterparts. This can include inequality of pay at work, taking career breaks, or taking part-time positions due to an expectation they will take on greater responsibility for family commitments.
“This often leaves them less financially resilient and in the context of the cost-of-living crisis, where everyone is feeling the pinch, it places additional pressure on their financial wellbeing. This can have an impact both in the here and now but can also contribute to inequalities in the long-term, such as with pension savings.”