Advisers are being told to target their conversations at women as consumer research shows they have a bigger impact on household finances.
Most notably, among those surveyed who are cohabiting, married or in a civil partnership, 55% of women said they were solely responsible for choosing insurance and financial products.
The results came from a survey of 5,000 working age adults conducted by the Women in Protection Network which was co-sponsored by AIG Life and IPipeline.
It found that contrary to popular perception, while it was women who make the financial decisions – they were not necessarily getting the professional help to make sure the household was financially secure if something goes wrong.
More than seven in 10 (71%) women said they did most or all of the day-to-day budgeting for food, transport and clothes, though 63% of men claimed they did too.
The survey also found women were more likely to be a secondary earner in a household of two or more, rather than leading it – as they are the sole or main earner in just 37% of cases, compared with 63% of men.
Though a quarter of women (24%) are the sole earner compared with a third of men (34%).
Women unprotected
While a quarter of women (24%) and men (25%) said being too ill to work was the biggest threat to them being able to meet their financial commitments, only a fifth of women (21%) had critical illness (CI) insurance and only 14% had income protection (IP) insurance.
This contrasts with men where 23% had CI and 20% had IP. Broadly the same percentages had life insurance – 43% of men and 42% of women.
Almost half of women (46%) said a sharp rise in the cost of living was a major concern, while the majority (59%) said they were worried about how they would pay the essential bills over the next 12 months, and a quarter of women were very worried.
The survey also uncovered significant risk for the 39% of households with children under 18 if a woman cannot work, as they still did the bulk of the chores and childcare.
The research also found 77% of women said they did all or the majority of childcare (37% of men said they do), 73% of women did all or the majority of household chores (52% of men said they did) and 31% and 29% respectively said they evenly split childcare and chores.
Only a fifth of people surveyed (20% of males and 21% of females) said their partner or another person in the house would be able to pick up the responsibility if they were too ill to do it for a month, and this would affect the other person’s work or income.
A similar number – 20% of men and 24% of women – said they would turn to family or friends for help while one in six men said they would have to pay someone to do some or all of it – 16% of men vs 11% of women.
The loss of household income if a second earner was unable to work would leave one in five (20%) adults unable to afford the basic essentials.
A third of women (33%) and over a fifth of men (22%) said they would be able to meet the bills but they would need to cut back on luxuries. Streaming services, gym membership and gadget insurance would be the first to be cut if necessary, though men would be less willing to make such changes.
Where the additional help would come from upon a loss of income – and household support – for a while may also be a challenge. Women worried about it more too – 41% of women said it would be a concern if they were too ill to work compared with 34% of men.
‘Women should be on that call’
Emma Thomson, chairwoman of the Women in Protection Network, (pictured) said: “When we talk as an industry about who controls the house finances, we hear it’s largely men who speak to a financial adviser. We need to change that.
“What this research highlights is that household makeup is not as we thought as only a third of women live in a household with a partner and children under 18.
“More importantly, it’s women who are actually managing the house’s money, who are making the day-to-day money decisions and who have the biggest impact on the house’s finances if something happens to them.
“Both men and women need to be on that call with financial advisers and be the target of protection insurance education. There shouldn’t be the assumption that the house will be able to cope if something happens to either earner or that it’s men who do the heavy lifting financially.”
Camilla Hoskisson, head of marketing at AIG Life, said: “What is striking throughout this research is that women undervalue themselves when they’re essential in keeping a household running, though they are open to talking about money.
“Women clearly feel empowered to manage money, they know what they want to pay for and why, and we need to make sure that’s valued. If they’re managing the day-to-day decisions, it must feel like a real pressure right now with the cost of living crisis.
“As a financial services industry, we can lift some of the worry off women’s shoulders and help them take action so they feel more confident long-term.
“Having a chat with a financial adviser and spending a little money now to put critical illness or income protection insurance in place would relieve some of women’s emotional and financial worries of what would happen if they were too ill to work and can’t look after the people they care about.”
Nick Jones, director, marketing at IPipeline, added: “This research shatters age-old perceptions about modern families and households, highlighting the huge and increasingly important role women play in managing money and financial decision-making.
“There are some clear insights the protection insurance industry can act upon now, but past that – there is a sense that we need to do more to understand our customers. We have access to a huge amount of data, but are we using it in the right way?”
