Renters and those in mid-life being left behind by the recovery
WE are getting closer to returning to normal life (remember those days?) after the pandemic, but as we do, it appears that women are one of the groups worst-hit by the last year and a half's ravaging effects on our finances.
Women are not the only ones. They are just one of three groups badly hit. New research shows that renters and those in mid-life have also largely been left behind by the recovery. But of course, many women are in two, or all three of these groups.
Here are some key facts about how people in general stand, as we (hopefully) emerge from lockdown.
A quarter of people admit they are still just getting by, in terms of money, and nearly one in 10 of us say we are really struggling to manage.
Women are more likely to be struggling than men, and score lower on every financial aspect, from being able to build up an emergency savings fund, to saving for their retirement.
It appears, therefore, that women, more than men or any other group, would benefit from advice from a qualified, independent financial adviser.
People in general have a lot on their minds now, when it comes to taking care of their finances.
Around 45 per cent of us have worries about debt, and over half of us are worried that our income may fall.
Another 44 per cent of us are worried about bills. Over half of us are worried about saving for our retirement, as are those worried about being able to rebuild a cash nest egg to protect us in cases of emergency.
Money is not the only worry. The Office for National Statistics (ONS) tells us that two-thirds of people are worried about their mental health and wellbeing, and will continue to worry until such times as we have recovered to pre-Covid levels – whenever that may be.
Other issues showing that women are at a financial disadvantage are well-known.
First, there are the various aspects of the gender gap.
Women tend to earn less, and have smaller pensions, than men.
One reason for this is the ‘motherhood penalty'.
Women are usually the ones who, when they start a family, take a long break from working to be with and take care of their new baby. This reduction in their income affects their pension saving ability, and can last from five to 10 years, especially if other children follow.
If a woman does decide to go back to work after that, it is very often to a part-time job, to give them some flexibility to continue caring, and avoid hefty childcare costs.
What can you do now, to improve your financial situation?
As a first step, you could work to build up a savings buffer to shield you from future emergencies. Build up what you can, but a good target is enough to cover three to six months of essential expenses, and keep it handy in an easy access account.
Yes, this can be a big challenge, but if you did achieve it, you could turn your attention back to retirement saving, and increase your savings contributions into your pension at work.
Just a thought.
We have other ideas on recovering from ‘financial Covid'. Why not come in to us for a chat?
:: Michael Kennedy is an independent financial adviser and pensions specialist and can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice Ltd or at www.mkennedyfinancial.com