Women hardest hit by the financial crisis

The financial squeeze is affecting women far more than men. But has this always been the case?

Women are suffering more from the fragile economy than men, new research has suggested.
There is also a big gender divide in opinions on the economy, with women a lot more negative about the situation improving.%VIRTUAL-SkimlinksPromo%
To combat these financial problems, women are more likely to cut back on their spending than men, and are worrying for an extra hour and a half per month about money, the research from Which? claims.

Lower spending
The financial squeeze has led to women cutting back on everyday items in order to save money. Spending on food, socialising and household goods has gone down for women. 48% say they would find it hard to cope with an unexpected expense, such as the boiler breaking.

Men on the other hand seem a lot more confident about their spending. Nearly four in ten men, or 37%, would worry about paying for something unplanned. Men are also less likely to run out of money by payday with only 23% admitting to this compared to 31% of women.

Lack of savings
As women are being hit hardest by the financial downturn, they are also failing to add much to their savings. One in four has no savings at all while only one in six men are in the same position.

It's also more common for men to have savings of at least three months' salary with 42% having this amount to fall back on while only 27% of women in the same situation.

Financial gender divide
On average women spend around 11 hours each month worrying about money while men only dwell on their finances for nine and a half.

Men are also more positive, with 45% thinking they're in a good financial state whereas only a third of women can say the same thing.

Looking forward only one in five women thinks their finances are going to improve. This rises to 27% for men.

Why are women worse off?
This research shows a worrying pattern in which women are not able to save as much money as men and are being hit a lot harder by the financial crisis.

But just how unusual is this research? It's a fact women earn on average less than men, and as the majority take time off to look after children, they're likely to have less savings. Therefore what this research highlights is just how much situations like the financial crisis can impact on people who may already in a weak financial position.

Richard Lloyd, the executive director for Which?, says the Government is searching for way to support women but there seems little evidence of this. A brief glance at the headlines from the past few months reminds you that parents have been hit by the culling of benefit payments and there is also a lot less help for self-employed women.

Looking forward there doesn't seem to be much optimism either. With further cuts in the economy planned the problem is set to get worse and even when savings do exist there's little chance of making any return thanks to the Government's Funding for Lending Scheme.

How to avoid financial turmoil
One positive to come out of this data is that people are thinking about their finances more and not blindly spending and bury their heads in the sand.

There are benefits to be had and although they've been slashed, it's worth finding out if you're entitled to anything you're not recieving by getting in contact with a charity such as Turn2Us.

In an economy where jobs are unsecure and finances are fragile, putting aside something each month to fall back on in an emergency savings pot is one of the best ways to safeguard against further economic strain. Savings rates are dire at the moment, with the best lying around 2%, but if you can afford to put something away on a regular basis, you'll be in a better position.

Similarly if you're in debt, admitting this and seeking help is a much better option than resorting to an expensive payday loan which will lead you into more debt. You can find out more in our article - Where to get free debt advice.

Budget 2013: Winners and Losers
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Women hardest hit by the financial crisis

The Chancellor has cut the price of beer. He said a planned 3p rise in beer duty tax was being scrapped and replaced by a 1p cut on a pint of beer.

While lower interest rates are intended to boost borrowing for business and keep costs down for mortgage customers, the Chancellor brings another Budget devoid of encouragement for savers. Faced with near 0% interest rates and 3% inflation, there is no help for those who need to save for the future, or those that already live on their savings in retirement.

"Low interest rates are making life ever harder for people reliant on their savings. Their spending power is being reduced and their standard of living eroded on a daily basis," said Simon Rose of Save Our Savers. "The attack on savers is short-sighted and undermines the country's prospects for investment, growth and retirement."

A major headline-grabbing measure to help struggling first-time buyers is the new Help-to-Buy scheme. Made up of two parts, the first commits £1.3bn to shared equity loans that enable first-time buyers to borrow up to 20% of the value of a new build home towards a deposit, providing they can contribute 5% themselves. The loans will be interest free for five years and be repayable on house sale. The scheme will cover all new properties up to £600,000 in value – around 90% of all new homes in the UK.

The second is a Mortgage Guarantee for lenders, intended to help all families who are struggling with deposits. The scheme will make £130bn worth of mortgages available from 2014 and enable lenders to offer loans at higher-to-loan value, which will Mr Osborne said will "dramatically increase" the availability of mortgages. The guarantee will run for three years and apply to bold old and new property. Stephen Noakes, Mortgage Director at Lloyds Banking Group, commented: "We are very supportive of innovation in the housing market and believe that the mortgage guarantee scheme, will give a much needed boost to the housing market and most importantly address the issue of accessibility. "Crucially, this scheme will not only help first time buyers but also second steppers, a key segment of the housing market that is also in need of more support and attention. Whilst the property market is likely to continue to be challenging, the fresh support announced today will have a real knock on effect across the whole of the housing market and we expect it could help around 50,000 people a year."

Payment of taxes is the "glue that holds the economy together" the Chancellor said as he reaffirmed his commitment to crackdown on evasion and the professional services that advise on it. "With more measures to rein in Corporate Tax avoiders, the Chancellor has sent a clear message that aggressive avoidance is no longer acceptable," said Martin Hook, Managing Director of research and development tax specialists, Alma Consulting Group. "This will have a significant impact on the Big 4 and other firms who market tax avoidance schemes and will need to consider the morality of the schemes that they sell and the spirit of the tax legislation."

As was widely predicted, Osborne froze the fuel duty hike due in September 2013. He announced that his repeated scrapping of this duty has saved the average Ford Focus owner £7 on every tank of petrol.

Stating his commitment to helping entrepreneurs get ahead and recognising that the cost of employing people is a huge burden to small firms, the Chancellor announced a surprise move with National Insurance relief of £2,000. Called the Employment Allowance, he said the new measure means than 450,000 small businesses – which account for one third of all companies in the UK - can employ one person earning £22,000 or four people earning the minimum wage, without paying National Insurance.

"The Employment Allowance will certainly be a massive boon for small businesses. Not least because most weren't really expecting it," said Jonathan Elliott, managing director of MakeItCheaper.com. "Put it another way, a £2,000 saving for a typical small business is the equivalent of cutting their annual energy bill in half or putting 1,250 litres of free fuel in its fleet of vehicles." Yet the Government fell short on support for new enterprises, explains John Williams from Kuber: "Noticeably absent from the Chancellor's speech was any news of extending or enhancing the Enterprise Investment Scheme (EIS). Many were hoping to see the Government offer more help to start-up companies looking for second round finances, but nothing materialised."

There was bad news for public sector workers, who will see pay increases limited to 1% in 2015/2016. The government will also revisit 'progressive pay' which sees pay increase automatically each year which he said was 'difficult to justify' given that private sector pay has been frozen or cut. The armed forces, however, will be exempt from this.

Feeling the pressure on help working families, the Chancellor made a welcome announcement that working parents will receive a contribution from the Government towards the cost of childcare. Working parents will receive 20% - equivalent to the basic rate of tax - of their yearly childcare costs, up to a total of £6,000 per child. He said the move will save a typical working family with two children under 12 up to £2,400 a year.

Also, leaked this morning was the news that the Chancellor will raise the income tax threshold to £10,000 from April 2014 – a move he said will give 2.4million people at tax cut of over £200 each a year, as well as lifting two million people out of income tax altogether.
Yet while both moves are widely welcomed, they do little to counter the austere measures of previous Budgets, explains Clare Francis, editor-in-chief at MoneySupermarket.com:"Giving with one hand may be a positive, but taking away with the other through other tax increases and benefit cuts means that people are no better off. "In fact, the cumulative effect of this and previous budget changes, combined with wage stagnation and rising living costs means millions are worse off and an increasing number of families are on the breadline, struggling to make ends meet every month."
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