As we return to business as usual, not everyone is being swept along by the coronavirus recovery. While experts forecast that the UK economy will grow by 6.8% in 2021, there are still large portions of society that are concerned about their finances.
A study conducted by Hargreaves Lansdown found that 37% of women are ‘just getting by or struggling to manage’, compared to 29% of men. And according to the FCA, 51% of women show one or more characteristics of financial vulnerability.
Financially, women are struggling. So what can they do about it? Let’s take a look.
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Coronavirus recovery and women
The coronavirus pandemic has not been kind to women. In fact, female job losses because of Covid-19 stood at 5.7% globally, versus 3.1% for male job losses.
So it’s not surprising that women are being left behind in the coronavirus recovery. “Some groups have been hit harder than others, and many of them aren’t bouncing back at all,” says Sarah Coles, personal finance analyst at Hargreaves Lansdown.
The pandemic affected women more, largely because they tended to work in sectors that were heavily impacted. Retail and food businesses closed for a lot longer than other companies. As a result, women have been more likely to be on furlough for longer.
There is also the fact that women are more likely to take on caring responsibilities. When schools and nurseries shut, lots had to take furlough for childcare reasons.
Gender pay and pension gaps
Unfortunately, even before the coronavirus pandemic, gender pay and gender pension gaps existed.
Women tend to have lower average salaries and smaller pensions. The pandemic has exacerbated this problem.
Figures from the study of over 10,000 UK adults found that 61% of women are concerned about a sudden reduction in their household income. They tend to worry more about paying their mortgage and rent. And saving for retirement and building an emergency savings fund are big areas of stress.
Left financially vulnerable, many women are struggling to improve their situation in the coronavirus recovery.
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Next steps
Concerned about being left behind in the coronavirus recovery?
Here are some steps you can take to improve your financial resilience.
- Control your debt – Getting any debt you have under control is key to improving your personal finances. Outstanding balances on things like credit cards or store credit can prove to be expensive. High-interest charges can quickly build up and damage your personal finances.
- Save for emergencies – Building up an emergency savings fund is crucial to improving financial resilience. Having a cash buffer in something like an easy access savings account means that you can cope with unexpected costs.
- Protect your family – Life can be unexpected, and if something was to happen to you. it can hurt your loved ones. Taking out life protection can ensure they are looked after.
- Plan for retirement – While there may be demands on your money now, you need to think about the long term too. The earlier you get to grips with your pension, the more chance you have of building up a large enough pot for retirement.
- Invest to grow your wealth – Once you have a buffer in place and are confident in your pension savings, it may be time to consider investing. While there are no guaranteed returns, it could give you the opportunity to make your money work harder for you.
