Striving for Financial Freedom for Women

For years women have strived for change when it comes to finances. Women have fought for equality, their voices to be heard at work and remuneration that reflects their value. However, with financial discrepancies in societal expectations, wages, and the future of finances, women have had to become financially resilient – not just in the face of change but in the face of adversity.

We look at the barriers women face when it comes to talking about finances, learning about money and how to financially protect themselves, from a young age through to retirement.

Financial confidence from a young age

When it comes to financial literacy and confidence, we explore how women are educated compared to their male counterparts.

From a young age, women are taught to be housewives, princesses, and nurses, whereas men are conditioned to want to be high-flying doctors, lawyers and engineers; careers that see them in positions of power of money, compared to the nurturing roles of women.[i]

It’s not just down to what women are earning compared to men, but also their confidence around managing their money; Insuring Women's Futures found that only 37% of women aged 18-24 do feel confident handling their finances, compared to almost half of men[ii].

As we grow, this narrative continues with male genders more likely to earn and invest more, and generally seem to have a stronger grip on how to make their money work for them. For example, over half of women in early adulthood say that they do not understand enough to make informed decisions about retirement savings. The imbalance in pension provision between couples leaves women exposed if they’re not involved in early retirement planning[iii]

Women become less financially resilient through their life course with relatively little savings to cushion – in fact, a third of women in their 30s say that their money wouldn’t even last a month if they lost their main source of income.[iv] This lack of financial barrier should the worst happen, means that women are more vulnerable to themselves or their partner becoming ill and unable to earn.

With women’s focus leaning more towards taking responsibility and organising money management (the money they have), men tend to have the higher financial knowledge and are better at financial planning. Research shows that women are more financially risk-averse, however, there are still fewer women that take out a protection policy; something that can provide financial support in times of need[v].

Being financially resilient and planning ahead, including learning the value of protection should be taught at a young age, especially to those with less access to the right information. Because if women’s finances are less to begin with and are spread out more, it makes it even more important to have protection in place; so starting the conversation, especially to the younger and female generation, is vital.

Legal & General’s Marketing Manager, Hazel Johnston, agrees: “My hope is that we can really start appealing to the younger generation rather than people only thinking of insurance when it’s too late. When I speak with my younger sister and her friends, it seems that insurance is seen as an ‘older thing to have'. I hope that we can make use of digital strategy and social media to try and capture the attention and related to this generation.”

In order to shape the future for women when it comes to finances and education around money and protection, it’s important to educate the younger female generation and therefore position information around policies, investing and planning in a way that makes sense to everyone.

“The children of today will not prioritise the same things as our current customer base do, so we need to think about how we engage with them and have products to suit their needs.” continues Johnston.

Working life

The gender pay gap has been well documented, and yet there is still disparity among genders in the workplace. In 2020, it was recorded that there was a higher percentage of men in employment compared to women; and with the gender pay gap at 7.4% women are already on the back foot financially before even considering external factors[vi].

The impact of the Covid-19 pandemic

The pandemic highlighted further inequalities amongst genders, too. Whilst the pandemic was at its peak in 2020, more women took time off to handle the home-schooling responsibility or would be more likely required to take time off work if children were sent home with the coronavirus.[vii]

Those that didn’t voluntarily take annual leave to handle homeschooling during the pandemic still found themselves out of work with women being five percentage points more likely to have lost their jobs due to Covid, than men[viii].

As restrictions come to an end, the effects of the pandemic rage on with women being the ones who are continuing to feel the economic and societal consequences longer term.[ix]

Opportunities with career development

With more companies continuing to work from home or hybrid working even after the pandemic, it does mean that women may be able to find the balance between home and work life more easily, with some taking it as an opportunity to further advance their careers. “Statistics do say that a large portion of balancing homeschooling, childcare, work and the household was done by women – and that, on average, women are therefore feeling the burnout more than men following the pandemic,” says Hazel, “I feel this could potentially result in more women feeling they need to weigh up their options and feeling like they need to decide on a career or family life, which is a real shame”

But what can women do to further develop their careers, even with the pressures of the pandemic and family life?

“I think everyone has the responsibility to seek development and consider options which maybe didn’t present themselves before, and I would hope that wider role availability would help with gender balance” continues Hazel.

The importance of protection for female entrepreneurs

Whilst running your own business can be rewarding, it can also leave you more vulnerable to staff shortages through illness, and can be especially impactful if you lose a key member of staff. Therefore, putting the appropriate protection in place is important.

However, women may have more of a need for income protection than men. Whilst both genders experience the same day-to-day pressures of running a business, women are more likely to be pulled away from work to take care of relatives or children. Women make up 62% of the 1.3 million people in the UK who act as carers for family[x].

Over the years, there’s been an increase in female-founded businesses, and during the pandemic, we saw a surge of small business start-ups as a result of those put on furlough schemes or experiencing redundancy. In fact, there was a 15% increase in women starting a business from 2016 to 2020[xi].

Tip from MDM Hazel Johnston: It’s a known statistic that women feel less confident than men on average. I have always personally found that if there is a situation where my confidence is knocked, speaking to either a coach, mentor, sponsor or all three has been a huge help. Talking it through with them and having someone championing you puts any situation into perspective.

It’s not just the gender pay gap or role expectations that differ when it comes to finances and men and women, but also a difference in the need for protection.

Nearly 1 in 3 consumers say that they don’t need income protection but, our own risk calculator shows that women have a 42.5% chance of being unable to work for one month before the age of 65 because of an illness or injury. The myths that surround the perception is that people think they don’t ‘need’ protection[xii].

And if a woman was to have to give up work for reasons listed previously, it may be thought that income protection isn’t needed as there’s still a source of income from the main breadwinner – but roles at home and the impact on finances and responsibilities show a different story…

The pressures of home life

The pressures on women don’t stop in the workplace, with more women than men taking the lead at home with running a household. In fact, the average stay-at-home mum puts double the amount of working hours as a full-time employed person, with 94.7 hours a week spent on home tasks[xiii].

Although, it’s not just stay-at-home mothers that take on the home role. Known as the 'mother’s load', women – even if in full-time employment – are still more likely to put in the extra shift at home with household chores and childcare.

According to the Office of National Statistics, those that undertake unpaid work at home contribute to 56% of the 'UK's Gross Domestic Product'; which measures and applies value to the paid work in the UK[xiv].

The ONS also states that, in the last ten years, the value of unpaid homework has grown faster than the economy itself because the cost of paid childcare has risen faster than inflation[xv].

Often, this isn’t taken into consideration when taking out insurance and only take cover out for the breadwinner.

Fewer women than men protected

“I read an article last week which stated that 40% fewer women buy protection than men,” explains Hazel, “at first, I was surprised by this statistic however, when reflecting on this and linking it to the gender split of those working in roles across the sector, it isn’t so surprising.”

Perhaps it isn’t surprising because if, on average, more men are the breadwinner in the household, then a policy is more likely to be taken out by them. Equally, the conversation around protection is geared towards men.

“These are products where there has been a predominantly male perspective in designing, marketing, and selling them. I think it is hugely important that there is a diverse range of people in all aspects of the product journey from initial development all the way through to the advisers who close the sale. I believe more diverse we can be (and not just with gender), the wider a market we can appeal to which in turn only strengthens the financial resilience of our society”

Read Hazel’s full Q&A as a woman in protection.

Navigating divorce

Our research shows that over a third (38%) of those asked consider their divorce to be unfair financially, but surprisingly only 3% seek out professional financial advice[xvi].

It’s not just our exclusive research that has this conclusion – many other sources cite divorced women as being significantly worse than men and their female counterparts who have never divorced[xvii].

This is usually because after divorce, men’s disposable income increases likely from the sharp difference in earnings.

The effect of divorce

The impact to women isn’t just at the point of divorce – women continue to struggle through pensions and retirement due to divorce, as well as adjusted mortgages terms lasting longer as a result of reduced income.

If there are changes in circumstances to the relationship and the name on the mortgage then updates to a policy would need to happen too and the later in life that a policy is taken out (whatever the policy) the most expensive the monthly premiums may be[xviii].

This could be off-putting to a person that is already financially strapped and doesn’t understand the need for protection. The earlier a person takes out a protection policy, the cheaper the premiums may be, so getting protection earlier rather than later will help in the fight to be financially resilient, divorce or not.

Financial Freedom in Retirement

On average, a woman now in her 60s will retire with approximately £51,000 of savings. By comparison, men of this age group will retire on average with a more comfortable sum of £156,000 – triple to wealth[xix].

Rita Butler-Jones, co-head of Defined Contribution at LGIM says "however, too often we see women are left worse off financially as a result of the stark gender pensions and pay gaps, and this imbalance continues through poor choices as they move into retirement. As an industry, this issue rests on all of our shoulders and it is important that we continue working together to educate and inform our members of all the options are available to them, so that they can make the right financial decisions for their future."[xx]

Surviving Changes to your Way of Living

According to Harvard Health, men are statistically more likely to die before a woman. So if your partner is the one that handles the finances, it can be a shock to the system in more ways than one if your partner passes away.[xxi]

Learning to be financially independent in later life can be a difficult adjustment, and with less income from reduced pensions and retirement plans – or the absence of a secondary (perhaps the main or only) income can be extremely difficult.

How Can Advisers Help?

There’s an opportunity to support and educate women on the value of protection and financial resilience through insurance.

But how can you start the conversation and ensure value-added?

  • Listen – get to know the differences for the financial impact on women and how women understand and manage their own money. Aim to support their infrastructure and aspirations for their finances.
  • Plan – women are central to the family unit and helping them plan for the financial future is vital.
  • Educate – from buying their first home to starting a family to retirement and widowhood; it’s important to give women the knowledge and confidence to discover their financial sureness
  • Communicate – don’t use a ‘one size fits all’ approach when having a conversation around financial resilience and the need for protection
  • Diversify – employ female advisers and make room at the table for women in the workplace to ensure you don’t forget this key demographic.

It’s important to tailor your conversation to the specific needs and requirements of a woman, whatever stage of their life they are seeking protection.

If you want to discuss the power of protection and female financial literacy, reach out to your MDM or BDM.



[i] HuffPost Life |'Girls Can Be Princesses. Boys Can Be Anything They Want.'

 She The People TV | Women are Natural Nurturers: But Who Decided That?

[ii] Insuring Women’s Futures | Financial Wellbeing  

[iii] Diversity Q | Why women need help from their employer to understand their pension

[iv] Legal and General | Deadline to Breadline Report

[v] Your Money | Gender savings gap emerges as Brits hit their 30s

[vi] Office for National Statistics | Gender pay gap in the UK - Office for National Statistics

[vii] The Independent | Women more than twice as likely to ‘quit job due to caring responsibilities’

[viii] University of Cambridge | Women bear the brunt of coronavirus shutdown in UK and US

[ix] The Independent | Women more than twice as likely to ‘quit job due to caring responsibilities’

Business Insider | Coronavirus May Infect More Men Than Women, Smoking Could Play a Role

[x] St. James’ Place | The importance of protection insurance for female entrepreneurs | St. James's Place

[xi] UENI | 2020 Report on Gender and Small Business  

[xii] Legal & General | Deadline to Breadline Report

[xiii] ENEI | The Value Of Mothers

[xiv] ENEI | The Value Of Mothers

[xv] Office for National Statistics | Women shoulder the responsibility of 'unpaid work'

vi] FT Adviser | How divorce can affect retirement -

Legal & General | Clients going through a later life divorce

[xvii]Australian Institute of Family Studies |The long lasting financial impacts of divorce for women 

[xviii] The Guardian| The biggest financial risk for women today? Embarking on a relationship 

 The Independent |Women worse off after divorce than men

[xix] Milsted Landgon | Women Save and invest less than men during their lifetime

[xx] Legal and General | Most Brits unaware of pension tax penalty which hits women hardest

[xxi] Harvard Health | Why men often die earlier than women


Other references

Legal and General | Finding Financial Fairness

Legal and General | Supporting Your Clients Through Divorce in Later Life

Business Insider | Coronavirus May Infect More Men Than Women, Smoking Could Play a Role

FCA |Gender, personal finances and Covid-19  

Chartered Insurance Institute | Securing the financial future of the next generation