The campaign for equality between women and men released on 15th November 2007 Women’s Financial Assets and Debts (1) a groundbreaking report which provides some of the first detailed information about women’s and men’s levels of savings and debts, complementing the more developed understanding of gender differences in pay and income.

The report looks at the financial behaviour of women and men in different situations and through changes in their lives. The causes of these differences between women and men complex, and are likely to be a combination of different levels of income, caring responsibilities and attitudes towards financial priorities. Key findings include:

There are large differences in women’s and men’s levels of savings, private pension provision and debt within couples. In some instances differences within couples are larger than differences between single women and men (2)
Differences in couples are magnified when relationships break down and men tend to recover financially more quickly than women (3)
Becoming a parent has a much greater “economic shock” on women than on men (4)
Lone mothers who are particularly disadvantaged financially (5)

Director of the Fawcett Society, Dr Katherine Rake, said:

“Most couples would say that they want to be equal partners. And yet we have further evidence here that where money is concerned, there is still a big divide.

“At the root of the savings and debt gap are ingrained inequalities such as the pay gap and gender stereotypes that mean that women still spend much more time on the unpaid work in the home such as caring for family.

“This research shows the need for more to be done to enable women and men to have equality at work and more financial support and advice tailored to women’s different needs.”

Notes:

This work has taken place as part of our Women’s Financial Assets Project, kindly funded by the Nuffield Foundation and the Friends Provident Foundation. More information at http://www.fawcettsociety.org.uk/index.asp?PageID=431 The research is based on new analysis of the British Household Panel Survey (BHPS) and Family Resources Survey (FRS) 2004-5. The initial analysis of these datasets was undertaken by Professor Steve McKay of the Institute of Applied Social Studies, University of Birmingham. The FRS data is based on the 2004-5 survey which conducted interviews with 49,220 adults living in 33,202 family units. In order to track individuals over time, we have used BHPS data from a number of years in the period 1991-2005. Numbers of adults answering the debt, savings and pensions question fluctuate from year to year, but are normally around 8,500.

* Savings: Among those who have never been married and are saving, both women and men contribute a median average of Ł100 a month to savings. Married women contribute a median average of Ł100 a month while married men save Ł150. Married men who have savings hold a median average of Ł8,000, compared to married women’s Ł5,000.
* Pensions: 54% of single men and women contribute to an employer’s pension scheme, compared to 72% of men and 68% of women living with a partner or spouse.
* Debt: Never-married men who owe money have a median average debt of Ł5,000 compared to Ł3,000 for never-married women (this is a gap of 40%). For married women the figure is Ł2,000 compared to married men’s Ł5,000 (a gap of 60%).

For instance, we tracked married women and men who went on to divorce. In the base year (before divorce took place) 36% of the men were saving from their current income, compared to 34% of the women. One year after the divorce, saving activity had dropped by a greater degree among the now-divorced women; 28% of them were saving compared to 32% of the men. After five years, men’s saving activity had recovered fully and was higher than before divorce; 42% were saving. But it took women ten years to recover and reach 39% saving rates. The savings gap (the difference in the median amounts held in savings and investments) for married women and men is 38%. For separated women and men it is 87% and for divorced women and men it is 41%.

Before a first child is born, mothers and fathers-to-be were almost equally likely to be saving; 46% of women and 45% of men were saving. One year on from the birth of a first child, both new mothers and new fathers become less likely to save. But the drop is much more dramatic for women, falling to 34% of new mothers compared to 42% of new fathers. Fathers’ saving rates recovered fully and after ten years 46% of fathers are again saving. But a decade on, but mothers’ saving rates had climbed back no further than 40%.

For instance, lone mothers are the family type most likely to be in arrears (behind with bills or credit commitment). 21% of lone mothers are in arrears, compared to 10% of parents in couples and 7% of single people without children.

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