March 8 is International Women’s Day, a global day celebrating the social, economic, cultural, and political achievements of women. The day also marks a call to action for accelerating women’s equality.
In recognition of this year’s IWD, a number of organizations have released new research about women and finances, with a focus on how the COVID-19 crisis has disproportionately impacted women, the need for more financial advice and education, and anxieties about having enough for retirement.
What follows are some of the more notable findings.
Lincoln: Pandemic accentuates gender pay gap
One-third of women say they are struggling to make ends meet, according to new research from Lincoln Financial Group.
The company’s January 2021 Consumer Sentiment Tracker found that while men are more focused on financial issues like the impact of taxes, stock market volatility and long-term-care expenses, women report the pandemic has resulted in a greater focus on their day-to-day finances (71%) rather than planning for the future.
The Lincoln study found the COVID-19 crisis has hit women harder financially with more frequent job impacts than men (35% vs. 28%), driving their top concerns of covering day-to-day expenses (34%) and a lack of emergency savings (45%).
As men are taking on more strategic long-term financial actions like meeting with a financial advisor, women are enduring financial hardships in order to make necessary and immediate financial decisions. They are delaying major purchases like cars and homes (24%) and drawing from their emergency funds (21%).
“The research demonstrates that the pandemic has accentuated the gender income gap. Millions of women left the workforce in the last year not only due to job loss, but because of caregiving responsibilities at home,” said Kristen Phillips, senior vice president, Corporate Marketing, Communications and Strategy at Lincoln. “As a result, many are living paycheck-to-paycheck with minimal savings, unsure of how to prioritize retirement and their long-term financial outlook too. As an industry, we have an opportunity to help provide women with the tools and knowledge that will enable them to create more positive outcomes.”
One area where women could use a boost is feeling more empowered about their financial future. Lincoln’s research found that women are more than twice as likely to be unfamiliar with financial planning and investments than men, who are increasingly reading and learning about financial markets and investing. Men are also currently working with a financial professional in greater numbers than women (42% vs. 26%).
While there is still more to be done to close the financial gender gap, the good news is that 70% of women say they want to take steps to better protect themselves and their families financially.
Wells Fargo: Younger women earning “Breadwinner” title
Progress is being made in the gender pay gap in some circles—particularly among younger generations.
A Wells Fargo study released today in conjunction with IWD found nearly one-third (32%) of married Millennial and Generation X women reported being the primary breadwinner — one and a half times higher than older generations.
Additionally, half of Millennial and Gen X women (51%) stated they lead the household finances as compared to only 40% of women in older generations.
“The economic recovery from COVID-19 will be heavily influenced by women as the next generation continues to increase their earnings potential,” said Veronica Willis, investment strategy analyst with the Wells Fargo Investment Institute.
The survey found women in younger generations see more barriers in developing their financial skills. More than a third of Millennial and Gen X women said they find financial concepts intimidating (39%) and did not learn enough about finances while growing up (34%). One in five Millennial and Gen X women (21%) said they do not have enough time to devote to building financial skills, as compared to only 6% of women in older generations.
Two-thirds (68%) of Millennial and Gen X women said they get extremely anxious when there is a lot of uncertainty, as compared to only half of women in older generations.
“The financial anxiety experienced by the younger generation during times of economic uncertainty is likely a direct reflection of their relative inexperience getting through financial hardship,” said Nancy Amick, senior family dynamics consultant with the Advice Center within Wells Fargo Wealth & Investment Management. “Prior generations have the benefit of past experience. Many of these women have weathered turbulent markets and uncertain economic environments.”
NAPFA: Women face greater financial challenges than men
Recent research from the National Association of Personal Financial Advisors (NAPFA) raised some red flags about financial inequities between women and men, specifically concerning financial literacy and planning.
NAPFA’s 2021 consumer survey found that:
- Nearly half (45%) of American women say they have a stressful relationship with money, while only a quarter (26%) of men say the same.
- Nearly half (45%) of women say the pandemic-induced increases in job losses and furloughs have made them more likely to bargain hunt or become thriftier, whereas a third of men say the same.
- When thinking of retirement, two in five women (40%) are most worried that they will not have enough money to retire comfortably, compared to 29% of men.
- If they could go back and “re-do” a financial decision that they made in the years leading up to the pandemic, 41% of women say they would establish an emergency fund or contribute more to their emergency fund; 23% of men say they would do the same.
- A third of men say they are “pretty confident” when it comes to investing. Among women, the number is fewer than one in five (18%).
Additional findings from NAPFA’s 2021 survey, including breakdowns by gender and generation, can be accessed here.
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