Women More Likely to Be Worse Off Financially After Lockdown

After six months of lockdown, women are more likely to be financially worse off than men, according to new research from investment broker AJ Bell.

Nearly one-quarter of women reported having lost all or part of their income due to COVID-19, compared to a fifth of men.

Although there is not a vast difference between the experience of the sexes, women are more likely to report being financially disadvantaged than men. This may reflect the fact that some of the sectors most hit by COVID-19 – in particular, hospitality and retail – tend to employ significant numbers of women. Many women also work in low paid and often insecure jobs which may also leave them vulnerable to the effects of lockdown.

said AJ Bell's senior analyst Tom Selby

The big concern now is whether that picture is going to get better any time soon. The Government is desperately trying to encourage people back to work but in some sectors that is proving very difficult and unemployment has started to creep up, albeit from a very low base.

The news comes days after professional networking platform LinkedIn reported that the proportion of women being hired fell by 3% across all sectors at the start of lockdown, and up to 13% in industries such as recreation and travel.

Women are facing greater hurdles when it comes to employment opportunities and career progression due to the global pandemic. Many women have had to juggle ever-increasing work commitments with heightened childcare and household responsibilities.

said LinkedIn's director Janine Chamberlin.

Over one-quarter of working mums reported caring for children by themselves. Compared to men, one-third of women providing childcare said they did so on a full-time basis since the start of the pandemic, compared to less than a fifth of men.

Despite the challenges faced by women juggling the demands of work and family responsibilities, men reported a greater reduction over lockdown.

On average, men took a £3011 pay cut since the start of lockdown, compared to an average of £2,107 for women. That's an average of £463 per month for men, and £324 for women.

Adjusted to account for the gender pay gap (which was 17.3% in 2019, according to the Office of National Statistics), men still lost a greater portion of their salaries compared to women.

For both genders, job loss or furlough was the main cause of financial hardship for one fifth (22%) of those whose finances had taken a hit. Partners and spouses losing work, or being forced to take a pay cut were the next most common factors affecting people's incomes.

The danger is that this accelerates as the furlough scheme comes to an end next month. Furthermore, with the UK's 'R' number above one and new local lockdowns instigated in the North of England, any thoughts that the virus's spread is now under control are fast becoming a distant memory. If businesses are again forced to close, this will inevitably create further employment and financial uncertainty for millions of people. That said, six months into the pandemic it is not all doom and gloom, with the majority of people financially unaffected by lockdown and 14% actually better off than they were before lockdown.

said Mr Selby

Those who reported being better off financially were more likely to be young people (age 18-34) and saved an average of £2788 over six months.

Reduction in spending on everyday expenses, such as driving and going out, were the main source of saving for 70% of the group while cancelling holidays and saving money by not commuting also helped to reduce expenses.