Less than half of UK women or 45 per cent feel financially independent, with one in ten or 11 per cent doubting they would ever accomplish this, according to Fidelity International.
Fidelity’s second Global Women and Money study, based on data from more than 6,000 women in the UK, Germany, Hong Kong, Japan, Singapore, China, and Taiwan, looks at the topic of financial independence.
Women in the UK, along with 33 per cent of German women, 38 per cent of Japanese women, and 45 per cent of Singaporean women, are among the least financially independent of the seven economies studied by Fidelity International. On the other hand, 69 per cent of Chinese women and 72 per cent of Taiwanese women are the most confident in their positions.
Less than a third or 32 per cent feel confident about achieving their financial goals, and just 28 per cent report they are free of money problems. Only a third, or 31 per cent, believe they will be able to support themselves and their families satisfactorily after retirement, leaving the rest uncertain about their long-term situation.
As a result, 38 per cent of individuals who do not consider themselves financially independent believe they are unable to make their own life decisions, with 30 per cent relying on a partner’s income and 24 per cent having outstanding obligations.
Those who consider themselves financially independent attribute their independence to having enough income to cover their outgoings, being debt-free, or having built up a savings cushion to handle unforeseen expenses. More than half of women or 44 per cent feel their finances allow them to design their own lives, emphasising the importance of financial independence in enabling and empowering women to make decisions.
Fidelity International investment director Maike Currie says: “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.
“Low-income levels, fears about job security and the compromise many women are forced to make between work and caring responsibilities are all named as barriers to achieving financial independence. We all have a central role to play in breaking down the barriers which are currently stacked against women and impact their financial wellbeing.”
Personal income is viewed as a defining indicator of financial independence, with the ability to cover daily expenses and bills or being completely self-sufficient being critical in achieving this. Personal resources to meet unexpected expenses and a long-term plan for retirement or a pension pool are also recognised as essential to achieving financial independence.
But with over half or 48 per cent of women seeing the high cost of living as the most significant impediment to improving their financial situation, these difficulties are likely to persist in the coming months or perhaps years. Low-income levels and concerns about job security are other obstacles to overcome in order to attain full gender parity.
Currie adds: “The disparity between women’s income levels and the rising cost of living is one of the main challenges standing between them and financial independence. While this continues to weigh heavily on so many households – as UK inflation climbs and household bills soar – 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.
“Securing female financial independence has never been more important. We need to empower women when it comes to managing their money, equipping them with the confidence and tools to achieve financial independence and resilience. This means better education on budgeting, investments and finances; greater access to financial advice and guidance; and increased help for those with caring responsibilities.”
