By Zoe Bailey, Chartered Financial Planner
As a nation, the UK is notoriously tight-lipped around topics that we find to be uncomfortable or that we label as ‘taboo’. Our health, relationships and financial affairs regularly tend to top the list of subjects that Brits shy away from discussing, even with our close friends and loved ones. Despite efforts to encourage the nation to take an active interest in their finances, the money taboo makes for a topic people struggle to discuss openly.
Over the past year, matters of health have understandably been prioritised above all else as we try to curb the devastating effect of Covid-19. However, the cost to the UK’s economy has also been severe, with the economy hitting a record annual slump in 2020 – causing a widespread impact to people’s professional, financial, and personal lives.
A recent report from the Office for National Statistics found that anxiety levels of UK adults had rocketed in 2020 during the periods when restrictions were tightened. Given the impact that it’s had on people’s job security, with many being put on furlough, taken a pay cut, or losing their job, it’s concerning to see just how much our quality of life has been impacted.
The relationship we have with our finances often goes hand in hand with our sense of security and mental wellbeing and struggling alone with money matters can intensify those feelings of anxiety.
For the ‘sandwich generation’, labelled as those usually in their 40s or 50s who have both children to care for and elderly parents to support, the financial burdens caused by the pandemic may be further squeezed. They’re likely to be juggling duties in all directions, feeling stuck in the middle of responsibilities affecting younger and older family members, and potentially lacking in financial and emotional support.
Despite all of these mounting pressures, many of us are still reluctant to share our financial worries. In fact, our research found that two fifths (39%) of UK adults do not believe that they can confide in their partner, spouse, or family friend if they feel anxious about money.
Interestingly, older adults (those aged 55 to 64 years old) were more uncomfortable about sharing financial concerns with their spouse or partner (42%), almost double the amount compared to their younger counterparts (22%).
There’s an even greater reluctance to confide in our employers and colleagues if we’re worrying about money. This is particularly pronounced among women, with the same research finding that close to three quarters (73%) of women admitted to not feeling comfortable sharing any money concerns in the workplace, compared to 65% of men.
So then, why should we be talking to others about our financial concerns? And why is this particularly important for women?
A key reason is to try and close the gender pension gap once and for all. WealthiHer’s 2020 Report found that the average amount in a 60-year-old woman’s pension pot is one third of that of a man’s pension at the same age. This is often because women start saving into a pension later in life compared to men, as they prioritise their children’s education costs and personally care for more short-term financial priorities.
With pensions being the biggest source of income for many people in their retirement, it’s critical that women are making it a priority to start building their later life savings earlier so they ensure they have enough savings to live comfortably in retirement and importantly have financial security of their own.
Sharing money worries can be a great step toward bringing about change. Speaking to someone, be it a friend, loved one or professional, can be the first step toward relieving some of the pressure in our own lives, as those initial conversations can also allow us to better understand our financial situation, map out our goals and recognise the steps we need to take to redress any financial imbalances.
International Women’s Day celebrates the achievements of women across the globe, while raising awareness to the numerous missions to further promote gender equality. The 2021 theme encourages people to ‘choose to challenge’ gender bias and inequality.
Research has shown that Covid-19 has exacerbated inequalities in UK society, with working mothers disproportionately set back by the pandemic. A recent survey by the Trades Union Congress found that nearly one in five had to reduce working hours, one in 14 took unpaid leave to look after children, and seven in 10 eligible mothers had furlough requests refused by their employer. The TUC have warned that, as a result, many women have been put in an impossible situation and forced to leave their jobs altogether in order to manage childcare.
While greater change may be needed to redress these imbalances, the theme of IWM may inspire lots of us to make changes in our homes and livelihoods. ‘Choosing to challenge’ could mean taking control of our personal finances and taking real action to plan for the future or addressing intergenerational financial responsibilities. It could also mean taking the time to better inform ourselves of our financial health, educate ourselves on our current position, start taking a more active approach towards managing our money and putting one or a few longer term financial savings goals into real action today.
Money concerns can be tricky or uncomfortable to talk about, but perhaps as an antidote to last year’s financial disruption; this is the year we aim to face them head on.
For more advice on how to become financially savvy, and to change finance from still being perceived as a man’s world, listen to Money, She Talked – a financial podcast by women, for women.
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Zoe Bailey is a Chartered Financial Planner and Director at Tilney. Zoe holds an Advanced Diploma in Financial Planning, an Investment Advice Diploma, and an MA in Economics, and her areas of expertise include pension and retirement planning, and advising divorcing couples with their settlements. Zoe is passionate about helping people understand and achieve their financial needs and objectives, regardless of what stage of life they are in or their financial and personal circumstance