Why women have it worse - financially - than men

Woman shopping in salesWomen may be the fairer sex, but when it comes to money and financial planning they tend to get a raw deal in comparison to men.

So is it their fault or is life conspiring against them? Here are 10 reasons why women generally have less cash to splash than their male counterparts.%VIRTUAL-SkimlinksPromo%

1. Smaller salaries
The average woman earns £500,000 less than her male colleagues over the course of her working life.

And according to the Fawcett Society, which campaigns for gender equality, the pay gap, which is 14.9% across the UK, jumps to almost 23% in London and 55% in the financial services industry.

2. Paltry pensions
Recent research from Scottish Widows showed that the gap between the amount men and women are saving for old age has grown to a record high, with women falling almost £30,000 behind.

Reasons for this include smaller incomes, stopping work to have babies and bring up children and relying on a spouse's income despite the risk of divorce (see below).

3. Children
Women's pensions are not the only part of their finances adversely affected by stopping work to have children.

For many mothers, taking a career break to have a baby also means missing out on promotions at work. And for those with two or more children, the cost of childcare can often make it pointless them working at all.

4. Lack of knowledge
Many women allow the men in their lives to control the family finances. However, it is crucial to build a credit history, not only so that they can take loans, mortgages and credit cards should they need to, but also for retirement saving purposes.

How can women get the best deals when they don't understand the offers available?

5. Emotions
While men are generally implacable when it comes to financial decisions, an increasing number of women are finding themselves supporting their partners out of the goodness of their hearts.

According to psychological studies, this is because women are more likely to want to act as "saviours".

To avoid heartache and financial ruin, however, it's a good idea to remember the old adage: "Never a lender or a borrower be."

6. Gender equality (in financial services)
Traditionally, women have paid less than men for car insurance because statistics show that they are less likely to have and accident and that any accidents they do have cost insurers less than those involving male drivers.

From next month, however, the new European Gender Directive, voted for by the European Court of Justice (ECJ) will prevent insurers offering female drivers cheaper cover.

Their premiums will rise to subsidise more foolhardy male motorists as a result.

7. Divorce
We are used to reading about rich and famous men's fortunes being decimated by messy divorces. However, when marriages break down, the biggest losers are often the women involved.

For some ex-wives, the main problem is finding the cash to keep going immediately after the separation (before a settlement has been agreed) without getting into debt, for others it is fighting for the necessary maintenance to keep their children housed and fed.

Ladies who had been relying on their husbands to fund their retirements can also find themselves high and dry.

8. Lack of interest
Women's reputation for managing their money less well than men is not all based on factors outside their control.

Many women simply are not interested in finance and are too caught up in the complexity of modern life to not focus on budgeting and planning. This will have to change if they want to turn their financial fortunes around.

9. Life expectancy
Women live longer than men, with a boy born in 2012 expected to live to 91 and a girl to 94.

As they have earned less money during their working lives, and saved less towards their pensions, than their male counterparts, women are therefore likely to have to work longer and longer to avoid financial hardship in old age.

On a positive note, however, annuity providers will no longer be able to penalise women for living longer from next month due to the Gender Directive described above.

10. Shopping!
Women are much more likely to enjoy a bit of retail therapy. However, shopping to influence your mood and wasting money on things you do not need is a great way to get yourself trapped in a spending spiral.

And there is no doubt that ladies who want their financial situations to improve need to avoid shopping sprees.

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Why women have it worse - financially - than men

Using a mobile phone to make and receive calls, send texts and browse the web while abroad can be extremely costly – especially if you are travelling outside the European Union (EU), where calls can cost up to 10 times as much as at home.

To avoid high charges, Carphone Warehouse suggests tourists ensure a data cap is in place, use applications to check data usage, turn off 'data roaming', avoid data-intensive applications such as Google Maps and YouTube and use wi-fi spots to update social networking sites.

Payment Protection Insurance (PPI) is supposed to help people to continue meeting their loan, mortgage or credit card repayments if they fall ill or lose their jobs. However, policies are often over-priced, riddled with exclusions and sold to people who could not make a claim if they needed to.

At one point, sale of this cover - which was often included automatically in loan repayments - was estimated to boost the banks' profits by up to £5 billion a year.
Now, though, consumers who were mis-sold PPI can fight back by complaining to the bank or lender concerned and taking their case to the Financial Ombudsman Service (08000 234567) should the response prove unsatisfactory.

It could be you, but let's face it, it probably won't be. In fact, buying a ticket for the Lotto only gives you a 1 in 13.9 million chance of winning the jackpot.

With odds like that, you would almost certainly be better off hanging on to your cash and saving it in a high-interest account.

No-frills airlines such as EasyJet may promote rock-bottom prices on their websites. But the overall fare you pay can be surprisingly high once extras such as luggage and credit card payment fees have been added - a process known as drip pricing.

Taking one piece of hold baggage on a return EasyJet flight, for example, adds close to £20 to the cost of your flight, while paying by credit card increases the price by a further £10.
It may therefore be worth comparing the total cost with that of a flight with a standard airline such as British Airways.

Cash advances, which include cash withdrawals, are generally charged at a much higher rate of interest than standard purchases.

While the average credit card interest rate is around 17%, a typical cash withdrawal of £500, for example, is charged at more than 26%.
What's more, as the interest accrues from the date of the transaction, rather than the next payment date, costs will mount up even if you clear your balance in full with your next payment.

Supermarkets such as Tesco and Asda often run promotions under which you can, for example, get three products for the price of two.

However, it is only worth taking advantage of these deals if you will actually use the products. Otherwise, you are simply buying for the sake of it, which is a waste of your hard-earned cash.
To avoid paying over the odds, it is also worth checking the price per kilo to ensure that larger 'economy' packs really are cheaper than the smaller versions.

Buy a train ticket at the station on the day of travel and the price is likely to give you a shock - especially if you are travelling a long distance at a busy time of day.

However, you can cut the cost of train travel by 50% or more by going online and making the purchase beforehand - especially if you book 12 weeks in advance, which is when the cheapest tickets are on sale.
Other ways to reduce the price you pay include avoiding peak times and taking advantage of so-called carnet tickets, which allow you to buy, for example, 12 journeys for the price of 10.

Most High Street banks offer packaged accounts that come with monthly fees ranging from £6.50 up to as much as £40, with a typical account charging about £15 per month.

Various benefits, such as travel insurance and mobile phone insurance, are offered in return for this fee. But whether or not it is worth paying for them depends on your individual circumstances.
Before signing up, it is therefore essential to check that you will make use of enough of the benefits, and that you cannot get them for less elsewhere.

Overseas money transfers or travel money purchases attract the same high rate of interest as credit card cash withdrawals.

Worse still, most credit cards – and debit cards – also charge you a foreign loading fee if you use them to make purchases while abroad.
You can, however, avoid these charges by using a Saga Platinum or Nationwide Building Society credit card.

Numbers starting 0871 cost 10p or more from a landline, while those starting 09 can cost more than £1 a minute from a mobile phone.

And the operators of these high-cost phone lines, some of which are banks, often get a cut of the call charges.
Most 09 numbers are linked to scams and should therefore be avoided at all costs, while 0871 numbers can often be bypassed by searching for an alternative local rate numbers on the saynoto0870.com.
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