Scottish Widows look at women’s money

And finds a generation of financially independent women – but childcare still a major issue.

Nearly one in five (17 per cent) of women claim to be the main breadwinner in their relationship, according to new research commissioned by Scottish Widows to mark its 200th anniversary.

A study of 2,000 UK women found that their financial role in the family has evolved significantly in the two centuries since the insurer was established in Edinburgh to help secure the financial futures of the widows of Napoleonic war casualties.

While a third (37 per cent) of women said their mothers were in charge of managing household finances while they were growing up, half (49 per cent) of women living with partners are solely responsible for this today.

And 32 per cent of this group claim sole responsibility for funding day-to-day household expenditure, including energy bills, groceries, childcare and clothing, compared to just 13 per cent of their partners.

Other households are more balanced, with 44 per cent of couples living together sharing the responsibility equally.

The study suggests that financial independence is especially ingrained in the younger generation, with the proportion of women in relationships who claim to be the main breadwinner in their household rising from 17 per cent overall to 25 per cent among 25-34 year olds.

This age group is also the most likely to keep finances separate from a partner, with more than half (52 per cent) admitting they do not share any bank accounts with their partner, compared to 39 per cent of women overall.

And financial independence now starts earlier: on average UK women first feel financially independent at just 22 years old.

But despite the move towards gender equality in relationship finances and among younger women, childcare continues to form a gulf between men and women, with two thirds (68 per cent) of women with children under 18 still primarily responsible for providing childcare.

And two in five (42 per cent) women with children said they agreed with their partner to take a backseat in their career to provide childcare.

A quarter (26 per cent) of women with children said having children has negatively affected their career progression, and 37 per cent feel it has reduced their financial independence.

It is not just providing childcare that impacts women though, as a quarter (26 per cent) of women who live with their partners with children under 18 are also responsible for funding childcare, compared to fewer than one in 10 women (8 per cent) whose partners fund this.

While over two thirds (69 per cent) of women living with a partner and contributing to childcare pay up to half of their salary towards it, 15 per cent claim the cost of having children looked after while they work amounts to more than half of their salary.

Remarking on the changes, Jackie Leiper, ‘Women and Savings Expert’ at Scottish Widows, said: “When Scottish Widows was established in 1815 women were largely excluded from the workforce, couldn’t vote, had no right to their own property – and yet today our research found that the average woman feels financially independent by the age of only 22.

But, as she continued, despite the huge strides that women have taken with finances, it is clear that childcare remains a significant barrier when it comes to career progression.

“We believe that both employers and the government should support families in balancing work and childcare responsibilities better,” she continued.

“As part of Lloyds Banking Group, we are committed to seeing women succeed in the workplace and ensuring everyone can find the right work-life balance and plan for a secure financial future.”

Scottish Widows was founded in 1815 as Scotland’s first mutual life office, and was originally established in Edinburgh to support widows of the Napoleonic war.

The Napoleonic era from 1793 – 1815 brought to battle the largest armies ever seen in Europe, costing more European lives than any other conflict before the First World War. Out of the one million men and boys who fought in the British army and navy, from a population of 14 million, 311,000 died.

Around 50,000 Scottish volunteers were mobilised during the Napoleonic Wars. A quarter of the Scottish male population also served abroad in a military capacity between 1792 and 1815.

At that time, with no welfare state, the death of a breadwinner could spell disaster for a family. Women were particularly vulnerable. They tended to be financially dependent on their husbands or other male relatives; in cases of serious misfortune, they could be left destitute.

In March 1812, a group of eminent Scotsmen gathered in the Royal Exchange Coffee Rooms in Edinburgh to consider setting up ‘a general fund for securing provisions to widows, sisters and other females’.

Nearly 200 years later the Scottish Widows’ Women and Retirement Report was set up. It has been tracking the shifting patterns of women’s financial behaviour over the last decade and means the company has data showing how women are preparing for their futures compared to their male counterparts.

In 2014 the 10th such report showed that while the number of women preparing adequately for retirement has reached a record high in the past 12 months, there is still some way to go to close the gender savings gap.

Women put aside on average 30 per cent less a month for retirement than men, largely due to barriers such as ongoing differences in pay, or a greater tendency towards part-time working and career breaks.

Behavioural factors, such as risk appetite, also have an important role to play.

Calculations produced by Scottish Widows last year found that the differing ways in which men and women choose to save – and how the system rewards and incentivises this behaviour – mean that even when men and women save the same over a 40-year period, men can end up between £33,000 and £89,000 better off.

And last year, Scottish Widows launched its Women and Finance campaign to shine a light on the inherent bias against women in the current savings system in the UK, and called on industry and government to do more to promote the financial needs of women.