Analysis of Financial Conduct Authority (FCA) data has revealed a wide a disparity between the number of people taking out general insurance and protection cover.
The FCA’s latest insight article based on data from the regulator’s 2020 Financial Lives survey, examines gender and personal finance.
While the survey reveals little difference between numbers of men and women taking out insurance, it also shows while 89% of men had taken out general insurance compared with 87% of women, less than half (49%) of men and just 46% of women had taken out protection cover.
Looking more deeply at these customers’ experience, there is little difference in experience by gender in terms of having trouble getting a refund from an insurance company or reporting that a claim has been handled poorly (4% of men, 3% of women).
Encouragingly few people had dropped their protection policies during the pandemic, according to the FCA.
And there was also little difference in the number of policyholders who cancelled during the pandemic to save money – just 7% of men and 6% of women had done so.
Cut back on essentials
Touching on how people’s financial situation has changed over the pandemic, 39% of women reported that they feel their financial situation worsened between March and October 2020 compared to 37% of men.
Looking into the differences by age group shows the highest proportion of those affected are women aged 18-24 (53%) and women aged 25-34 (48%). In the 65+ age group the trend is reversed with more men having seen their financial situation worsen compared to women.
Almost a quarter (22%) of women have cut back on essentials compared with 16% of men. And for both men and women, younger age groups were more likely to have experienced any of these signs of distress.
The findings also reveal men felt more comfortable dealing with financial services than women, with only 20% of men saying they had low confidence in managing money compared with 24% of women.
And under a third (32%) of men admitted having low knowledge of financial matters compared with 42% of women.
Savings and credit activity
Women also appear to be more risk averse in the way the manage their finances, with 69% of women saying they had low willingness to take risks compared with 82% of men and they were 1.3 times more likely to have a savings account than men.
A slightly higher proportion of women owned a cash ISA (37% vs 35%) rather than more risky investments, potentially reflecting a lower risk appetite.
But a higher proportion of men hold investment products with the largest differences being stocks and shares ISAs (19% of men compared with 12% of women) or shares and equities (26% of men compared to 17% of women).
The report also shows that since the start of the pandemic, more men than women have applied for and been turned down for credit.
Almost a quarter of men applied for credit between March and October 2020 compared to 18% of women, while 11% of men have been declined credit compared to 8% of women.
The data shows a higher proportion of men have taken out additional credit – 9% compared with 6% of women. A higher proportion of men have borrowed on one loan to make payments on another – 6% compared with 3% for women.
Men were more likely to have different types of credit products before the pandemic began, including credit cards, personal loans and motor finance.
However, there are some types of credit that women are more likely to own. These are mainly retail finance products such as store cards, catalogue credit, and high cost loans.