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Examining the impact of COVID-19 on female financial behaviours

Posted on 18 May 2022

Over the last two years, it has become increasingly clear that the COVID-19 pandemic has disproportionately affected women. Evidence from organisations such as the ONS (Office for National Statistic) shows that women were more likely to be furloughed from their jobs, to have spent significantly less time working from home, and to have spent more time on unpaid household work and childcare.

These conclusions are vital in illustrating the overarching social and economic effects of the pandemic on women. However, to avoid them being dismissed as "unfortunate but liveable consequences" of the last two years, more targeted, nuanced questions now need to be asked, particularly when it comes to the consequences of the pandemic on women's relationship with their financial wellbeing and wealth. Has the financial education gap improved or worsened over the last two years? Has there been any significant change in a woman's ability to invest and save? Has the perception of what it means to be "wealthy" changed?

It is important to recognise intersectionality and the fact that the categorisation of "women" or "female" itself is a generalisation, connecting with a broad spectrum of race, class, disability, sexual orientation and ultimately, individual experiences. However, the pandemic has shown that when disaster strikes, with immediate and long-term societal impacts, the experiences of so many women and the hardships they face are unsettlingly similar. Social norms set by patriarchal systems long ago ultimately still stand at the core of Western society. It is therefore under this lens that this article examines some of the unspoken economic consequences of the pandemic on women as a collective.

The WealthiHer findings

The WealthiHer network, founded in 2019 by CEO Tamara Gillan, is a powerful force in championing the transformation of the financial industry’s approach to women. The network's aim is to help women to be more understood, accepted and catered for in the financial industry.

In early 2022 the network partnered with data experts Kantar UK, to examine the impact of COVID-19 on female financial habits, mindset, and approach to investment.

When looking at general financial behaviour, the initial findings from the WealthiHer report show:

  • 55% women say they have saved more and 63% have spent less;
  • 35% of women say they have invested more than they had done prior to the pandemic; and
  • 33% say they have given money to charity or their local community.

Some of the impact is arguably not exclusive to women; the ability to save more and spend less could be similar for all genders due to the inability to go out and spend as one would normally. However, other than these more obvious reasons for change, there appear to be other forces at work. The change in pattern in female spending, saving and investing also appears to be attributed to a change or acceleration in priorities during the pandemic. In fact:

  • 93% of women say their home, family and friends have become more important; and
  • 75% say their community has become more important.

Furthermore, in both UK and Asian markets, success has become less about money or material possessions, with 56% of women agreeing success is more about being content than it is about money or luxury possessions.

Wealth = Freedom

The concept of freedom – that is, what it takes to be free for the modern woman – appears to be at the heart of this change. With so many of our freedoms limited during the last two years, the results of the research highlight how freedom is now considered by women to be the number one indicator of wealth. The traditional desire to be wealthy in order to buy more luxury items or have status in society now appears to belong to a bygone era.

The results show:

  • 94% of women say that the ability to choose what they want to do is the main reason for being wealthy;
  • 46% of women say their desire to be healthy stems from a desire to travel and have great experiences; and
  • 43% of women say it's about living where they want to.   

Financial force for good

We have previously explored the unlocked potential of women in finance and the WealthiHer data only confirms position. The results show that women are adding more to the global wealth group more than any other, with a key driver of women's growing wealth being education.

In the world of investing, the motivation for many women suggests they could be a "force for good":

  • 88% of women want to engage with, invest in and build businesses that are sustainable and socially responsible;
  • 92% of women under 28 years old say socially and environmentally responsible causes are vitally important; and
  • 68% of women believe behaving philanthropically and investing both their time and money is vitally important.

The pandemic has taught women that they need to plan for uncertainty and invest in a more sustainable, safer future. As a result, there is now considerable pressure on companies to take more accountability for their Environmental, Social and Governance ("ESG") policies. With shareholder activism a growing phenomenon in the last decade, it is clear that the more women invest their money, the more female shareholders can finally make their voices heard in large scale companies:

  • 69% of women say that investing in environmentally/socially responsible companies is more important than getting the highest return; and
  • 51% of women believe having environmentally sustainable practices is a leading consideration.

The case for male allyship

Whilst the potential is there, it is without a doubt true that change cannot come without a change of mindset for the whole financial sector. The WealthiHer data shows:

  • 72% of women feel they are not understood by the finance industry;
  • 72% of women feel that there are biases against women in the financial services industry; and
  • 60% of under 38 year olds believe that the typical investor is an "old white man".

Male allyship is key to escaping the echo chamber when it comes to greater equality in the financial services industry. This allyship includes supporting female progression, implementing cross-gender mentoring programs and challenging the "likeability penalty".

The research conducted by the WealthiHer network is useful for analysing how the pandemic has impacted the financial behaviours of women. The data clearly demonstrates how women have emerged from the last two years as a potential "force for good" in the financial services industry and could implement positive change in the sector if appropriately supported.

Mishcon de Reya has been a partner of the WealthiHer network since 2022.

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