Working women lack financial protection

Nearly half of all working women in Great Britain do not have any form of financial protection, despite a significant increase in their economic activity over the past 30 years and the dramatic rise in female breadwinners.

Although the number of women of working age is projected to overtake the number of men of working age in 2018, a recent research report by AXA suggests that the eight million GB working women who do not have Life Insurance, Critical Illness or Income Protection cover could potentially face serious financial shortfalls should the worst happen. For example, one in nine women will be diagnosed with breast cancer in their lifetime, resulting in severe strain on the family, both emotionally and financially.

While the average annual earnings of women are still not quite level with men (£20,476 compared to £26,297), the past 30 years have seen a significant rise in female employment (17.5%) and changing family roles, with more women than ever contributing significantly to their own or their families' incomes. In fact, one in four women will be the main breadwinner in homes by 2030, while women will own the bulk of Britain's wealth in 20 years. Women set up 30% of businesses in the UK and 25% of all businesses are already run by women.

However, despite being more financially independent than ever before, AXA's own research shows that more than one in four uninsured women (27%) might want to rely on their partner's insurance protection should things take a turn for the worse, which is an attitude more suited to the 1970s. As AXA points out, this protection is only likely to cover their partner's earnings not their combined income.

Iain Mallon, Head of Protection at AXA said: "We have seen a significant shift in the role of women since the 1970s, however this shift has not been replicated in women's attitudes towards protection cover. The ‘noughties' is an era in which women have greater control than ever before over their lives and their finances but they are still failing to recognise their own financial and lifestyle developments in their protection cover. Unlike during the 1970's, women becoming ill and unable to work now could have significant financial implications for the whole family. "

How have things changed?

Since 1978 the average annual household income has more than doubled.

Women are more likely to be working (both full time and part time) with the number of economically inactive women falling from 36.7% in 1978 to 26.4% in 2007, in stark contrast to men who are today more than twice as likely to be economically inactive (16.4% today compared to 7.9% in 1978).

Women born in 1950 can expect to spend a quarter of their lives in the ‘family stage' with young dependent children. For those born in the 21st century this will reduce to less than a fifth.

Nowadays more and more people of working age are living on their own (8% in 1981 compared to 14% in 2007), the majority of whom are women, with the number of marriages dropping from 416,000 in 1978 to just 284,000 in 2005 and the number of divorces rising by 2,000.

Since 1981 the number of lone parent households has more than doubled, from 6% of all households to 12% in 2007 and the number of lone mother families with two children has doubled from 4% of all families to 8% today.

Women's protection today:

50% of women across Britain have no form of life insurance, life assurance, critical illness protection or income protection.

Nearly half (46%) of all working women fail to have any form of protection.

40% of women with dependants do not have any form of life insurance cover.

43% of women with financial commitments do not have any form of insurance protection.

55% of women without insurance, have ongoing mortgage or rental commitments to consider should the worst happen

Just 19% of insured women without a partner believe they have adequate insurance cover in place should they lose their job.

The findings from AXA show that only a third of insured women believe they have adequate insurance cover in place should they, or their partner be faced with losing their job, while almost one in five (18%) feel they are financially independent enough to cope should this happen. One in ten women with insurance believes they would have to sell their home and relocate to a cheaper area if they were faced with the issue of unemployment.