Are young women falling behind young men in the financial education stakes?

Research by the Insolvency Service has found that young women are overtaking young men in the indebtedness stakes. According to the study, last year 7.8 women aged between 18 and 24 in every 10,000 adults became insolvent, compared with just 4.0 of men of the same age. This trend also continued in the 25-34 year old age range – with 32.8 in every 10,000 adults declaring themselves bankrupt compared with only 25.6 of men.

This is quite alarming and unless something is done to halt this, the UK could face a ticking time bomb of increasingly indebted young women.

The findings are doubly shocking when you consider that men also earn more than women. Recent figures by the ONS found that men earned on average £546 per week, compared with just £449 for women. Further research, by the CSFI think tank in 2012, found men were also more likely to invest in riskier, higher returning assets than women, so while women savers are less likely to lose their capital, they are perhaps more likely to see inflation eating into their savings.


So what is causing this disparity between women and men? According to the Insolvency Service, retaining unsustainable lifestyles is a big problem for women, especially in a digital age, where looking good and being seen with the right accoutrements is of manifest importance.

More significantly, there is a lack of adequate financial education. According to the CSFI report, more than 70% of the young people surveyed said they had not had any financial education at school, although most of these said they would have welcomed it.

But how can education close these gaps? Well, as I mentioned in a recent conference speech for Professional Pensions, while it is important to demystify the jargon in financial services, it is equally, if not more, important that prudent spending and saving become habit – without sufficient help, there is a risk women will fall further and further behind men.

A recent article in the Telegraph suggested it might be the connection between money management and maths that is at the root of the problem. There may be something in this, given the lack of women who pursue maths and science beyond GCSE level. There is certainly evidence that women lack confidence when it comes to money matters.

The UK refused to participate in the most recent OECD study on financial literacy, despite the fact that 18 other countries took part, suggesting the government is well aware of its failings in this respect. Perhaps this will change with the introduction of financial education to the national curriculum from this September – without it, any hope of financial equality between the genders could be lost.


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