Women hardest hit by the financial crisis

The financial squeeze is affecting women far more than men. But has this always been the case?

Women are suffering more from the fragile economy than men, new research has suggested.

There is also a big gender divide in opinions on the economy, with women a lot more negative about the situation improving.

To combat these financial problems, women are more likely to cut back on their spending than men, and are worrying for an extra hour and a half per month about money, the research from Which? claims.

Lower spending

The financial squeeze has led to women cutting back on everyday items in order to save money. Spending on food, socialising and household goods has gone down for women. 48% say they would find it hard to cope with an unexpected expense, such as the boiler breaking.

Men on the other hand seem a lot more confident about their spending. Nearly four in ten men, or 37%, would worry about paying for something unplanned. Men are also less likely to run out of money by payday with only 23% admitting to this compared to 31% of women.

Lack of savings

As women are being hit hardest by the financial downturn, they are also failing to add much to their savings. One in four has no savings at all while only one in six men are in the same position.

It’s also more common for men to have savings of at least three months’ salary with 42% having this amount to fall back on while only 27% of women in the same situation.

Financial gender divide

On average women spend around 11 hours each month worrying about money while men only dwell on their finances for nine and a half.

Men are also more positive, with 45% thinking they’re in a good financial state whereas only a third of women can say the same thing.

Looking forward only one in five women thinks their finances are going to improve. This rises to 27% for men.

Why are women worse off?

This research shows a worrying pattern in which women are not able to save as much money as men and are being hit a lot harder by the financial crisis.

But just how unusual is this research? It’s a fact women earn on average less than men, and as the majority take time off to look after children, they’re likely to have less savings. Therefore what this research highlights is just how much situations like the financial crisis can impact on people who may already in a weak financial position.

Richard Lloyd, the executive director for Which?, says the Government is searching for way to support women but there seems little evidence of this. A brief glance at the headlines from the past few months reminds you that parents have been hit by the culling of benefit payments and there is also a lot less help for self-employed women.

Looking forward there doesn’t seem to be much optimism either. With further cuts in the economy planned the problem is set to get worse and even when savings do exist there’s little chance of making any return thanks to the Government’s Funding for Lending Scheme.

How to avoid financial turmoil

One positive to come out of this data is that people are thinking about their finances more and not blindly spending and bury their heads in the sand.

There are benefits to be had and although they've been slashed, it's worth finding out if you're entitled to anything you're not recieving by getting in contact with a charity such as Turn2Us.

In an economy where jobs are unsecure and finances are fragile, putting aside something each month to fall back on in an emergency savings pot is one of the best ways to safeguard against further economic strain. Savings rates are dire at the moment, with the best lying around 2%, but if you can afford to put something away on a regular basis, you’ll be in a better position.

Similarly if you’re in debt, admitting this and seeking help is a much better option than resorting to an expensive payday loan which will lead you into more debt. You can find out more in our article - Where to get free debt advice.

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