Women suffering the most in financial squeeze

6th March 2024

Women are suffering the most in the financial squeeze, according to the latest figures from credit management group Intrum.

A survey of 20,000 consumers across Europe shows that people are spending more of their income on essentials than they did in the past. Banks recommend following the 50-30-20 rule, suggesting an allocation of half income to essentials, 30% to discretionary items and 20% to savings.

The financial crisis has made these target figures challenging for consumers to meet, with many struggling to stay afloat. On average, UK consumers are now using 59% of their income to pay for essentials such as housing, groceries and energy bills, allocating 24% to discretionary spending and saving only 17% of their income.

However, when these figures are broken down, the situation is significantly worse for women. Women spend an average of 64% of their income on essentials, compared with 53% for men. They spend 21% of their income on discretionary items, while men allocate 28% of their income to this category. Savings figures show that women are only able to put aside 15% of their income on average, compared with 18% that men can save.

Intrum UK MD Jim Appleby said “The financial crisis has exacerbated gender inequalities when it comes to money. Women are spending less of their income on luxuries and ‘nice to have’ items than their male counterparts. They are also saving less – something that has long-term implications for financial wellbeing.”

Unsurprisingly, women are feeling more downbeat about their earning power than men. They are also more likely to report that financial concerns are harming their mental or physical health. Almost half of women (49%) said lack of money has made them deprioritise their physical health – for example buying cheaper food or cutting gym memberships – compared with 39% of men.

In the last 12 months, 45% of women say their mental health has suffered as a result of worrying about their finances and bills (compared with 37% of men).

Despite these challenges, women are less likely to skip bills. When questioned, 16% of men in the UK said they expected to skip at least one bill this year. Only 10% of women said the same.

Ultimately, more than eight in ten of are planning changes to spending to cover the cost of living. Almost half of UK consumers (45%) are thinking about adding an extra job or side hustle to manage in 2024.

Appleby concluded “People are willing to work their way free of problem debt. But there is a feeling that even this won’t lead to the same standard of living their parents had. More than half of the people we spoke to feel they will be less well off when it comes to savings, property and pensions than the previous generations.”