Women’s financial futures look bright but they fail to see their real value warns AXA

New research from AXA reveals that today's woman is more 'financially important', taking on more responsibility for the household finances than ever before

17 May 2010

Posted in Financial results

During the recession more men than women became redundant and with the past 30 years seeing a significant rise in female employment (17.5%),1 predictions suggest that by 2030 one in four women will be the main breadwinner in homes. Alongside this, the gap in average pay is also lessening, leaving women in a financially more equitable position. Despite this, women are still failing to protect themselves when it comes to their dependants' financial security.

The research from AXA shows that, among women with dependant children, financial responsibility is certainly no longer a male preserve. Over a quarter (27%) claim to have sole responsibility for paying the family mortgage, with 30% solely responsible for the main household bills while 25% and 29% are solely responsible for children's education and childcare costs respectively.2

For those with no financially dependant children, over a third (36%) will carry sole responsibility for their mortgage and a similar number will be in charge of paying the main household bills such as gas, electricity and council tax.

The average working woman with financially dependant children will be carrying out a combination of paid3 and unpaid work totaling just over £45,000 per annum. And for those who are not in employment, their worth around the home is approximately £23,000.4

Yet only a third (38%) have any life insurance and only one in five (18%) protect themselves against critical illness, potentially leaving their families economically vulnerable if the worst were to happen.5 The majority of women have no protection in place and AXA stats show that out of those who do have cover, the average value of a life policy is only £90,000 and critical illness just £80,000 - enough to cover roughly two years of the average working woman's worth.6

For those who class themselves as housewives, the money would stretch a bit further but even fewer protect themselves with 38% holding life insurance but just 13% having any critical illness cover.

A staggering 37% of women simply believe they 'don't need' cover. However, AXA stats show that one in 10 women7 who take out a combined life and critical illness policy will either die or suffer from a condition enabling them to claim before the end of their policy and one in 25 who take out life cover7 only will die before the end of their policy. While 58 deaths per 1,000 (nearly 6%) among women will occur during key working years (before 60).8

Women with no dependants will not have the cost of childcare to consider but only 30% have any sort of protection in place.

AXA carried out a similar study in 2008 and comparisons reveal that, while the number of women with protection has increased slightly, most women still have no financial safety net. In 2008, 35% of all women had some kind of life insurance, today that figure is 38%, for critical illness cover the figures have risen more markedly from 12% to 18%.

Jamie McIver at AXA says “As AXA's research shows women are becoming increasingly important to the family economy yet leaving themselves and their dependants desperately vulnerable. And the future is likely to see the situation getting worse.

“I would encourage women to start focusing on their financial well-being, so that they avoid the potential financial meltdown they could find themselves in if they aren't protected.”

1 Labour Force Survey, ONS: Employment rates by sex, UK.

2 Onepoll research carried out in April 2010 among 4000 UK adults.

3 2008/09 tax year median gross annual earnings for full-time employees on adult rates who have been in the same job for at least 12 months were £25,800. For men, median gross annual earnings were £28,300 while the comparable figure for women was £22,2000.

4 Calculations based on time spent by males/females on household activities as per Onepoll survey carried out in March 2010 among 4000 adults.

5 Survey by Onepoll carried out in April 2010 among 4000 UK adults.

6 Average value of claim payout through the AXA Protection Account for the period of 01/10/2008 to 30/9/2009.

7 Based on AXA's mix of new business and projection of future claims experience assuming that premiums are paid for the full term of the policy.

8 The Lancet Journal - April 2010.

9 YouGov survey carried out in July 2008 among 2000 UK adults.