From the language used by adverts, to presumptions about our capability with money, financial inequality runs deeper than the gender pay gap.
Sometimes I buy handbags. This is because I have keys and a phone and a purse. It’s not because I’m female, using the money in my lady bank account to splurge on lady things.
And please don’t call me thrifty. I never splurge. I am not a bargain hunter or a shopaholic. I don’t have a pink credit card and I don’t hide purchases from my boyfriend. I’ve never been on a money diet.
Nor am I a ‘female investor’. Yes, I am a woman. And I am fed up of my money–the money I earn, save and spend – being infantilised.
From the language used by adverts, to presumptions about capability with money, financial inequality runs deeper than the pay gap. It’s there when the waiter puts the bill down in front of my dad, even though I’m taking him out for dinner. Or when a magazine presents a ‘money horoscope’ as financial advice. It’s when garages send quotes for women’s cars to the men they live with, or when landlords persist in contacting the male half of a couple. It’s there when I’m asked to talk on a panel for free as if what I do isn’t a job but a hobby. And it’s present in my male colleagues’ faces when I join in a conversation about the growth potential of global share funds.
There’s a pervasive narrative littered throughout the media, the conversations we have and the financial literature available, that men are better with money. Apparently, they earn, invest and build money, while women ‘just’ spend it. Author Chimamanda Ngozi Adichie told a story which brought to life this gap in her now-famous TED Talk We Should All Be Feminists. She was out with a male friend and gave a man a tip. “I opened my bag, brought out my money that I had earned from doing my work, and I gave it to the man,” she said. “He took the money from me, looked across at [my friend] and said, ‘Thank you, sir!’”
Throughout history women have never been financially equal with men. Even in more modern times, banks and lenders have discriminated against women. Before the 1975 Sex Discrimination Act banks could – and did – refuse women a mortgage unless they had a male guarantor. Even if a woman was out-earning her husband or her father, she still needed their signature to take out a loan.
“When I got married I applied for a mortgage, but they rejected it, saying I might leave work and have a baby,” Marilyn Beale tells me. She worked at a large bank in London from 1966-75, which granted its staff a great mortgage deal… but only if you were a man. “I used to say to the bank, ‘Yeah, but men leave too, for all sorts of reasons!’ No one expected a woman to want to continue working. If you had a baby you left and never came back, except to show the baby.”
Ridiculously, it was only in 1990, the year of Pretty Woman and Madonna’s Blonde Ambition tour, that married women were first taxed separately from their husbands. And as we recently saw, despite the 1970 Equal Pay Act which made it illegal to pay women less than men for the same work, it was only in 2018 (a mere 48 years later) that we saw the compulsory pay-gap audit, and even then it was only for companies with at least 250 members of staff. For women in the UK, financial feminism is about being paid as well as men and treated as well as men by our financial institutions.
The Personnel Problem
The knock-on effect of decades of discrimination and the resulting wage gap shouldn’t be under- estimated; earning less means women save less, invest less, and have much smaller pensions (five times less than their male counterparts). Female financial advisors are outnumbered six to one, and that’s at entry level, the imbalance at the upper levels is ridiculous. If you’re seeking out money advice, chances are you will be sat opposite a man, which only perpetuates the myth that money and getting rich is a man’s game.
Banks have also often been incredibly sexist when approaching women in their advertising. And the problem has endured longer than the Seventies flick, or Eighties eyeshadow. In 2017, a study of women’s responses to financial advertising concluded the sector was missing out on a potential £130 billion in revenue by failing to connect with potential female customers. The money saving expert (and ‘most trusted man in Britain’) Martin Lewis CBE told me, “It is less deliberate sexism and more an inadvertent prejudice towards women. Something the financial service industry needs to ask itself is ‘Why is the system not working for that cohort of people? Are we disenfranchising women by the way we do things?’”
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Laura Whateley, financial journalist and author of Money: A User’s Guide says, “I went to a reception at Downing Street. It was for the insurance industry and I was shocked that, even though you hear about it all the time, 99% of the people in the room really were white men with grey hair. I know the upper echelons of the City have a diversity problem, but to actually see it, in such an influential space, was so ridiculous. I felt like I was in a sketch.”
Laura outlines the domino effect of all white, all male line-ups. “These are the people making decisions about financial products and the insurance that we all need and rely on when things go wrong – that lack of diversity will mean that not enough of the priorities and realities for different kinds of people, including women, are taken into account at the top.”
Women have different needs to men. We live longer for a start, currently we’re taking more career breaks and are often the primary carer for both our parents and kids.
The pay gap between men and women in their 20s is nearly closed, but as women reach their 40s, their salaries plateau or drop – by age 40, women earn 13% less than men, and by their 50s, 16% less. “Pensions are a big issue for women,’ says Whateley. “I’d like to see the government introduce more ways to help flexible and self-employed workers – of which the majority are women – with mortgages and pensions. At the moment pensions are most generous for the highest full-time earners (mostly men), and this just increases the gender money gap.”
Even now, women are reporting that lenders have refused to grant them a mortgage because they are pregnant or on maternity leave. Helen, a corporate lawyer of 12 years, told the Institute for Public Policy Research (IPPR) that when she applied to extend her mortgage six months into a 12-month maternity leave, she was told by the lender that they couldn’t consider her salary “in case she didn’t return to work”. This is despite her telling them that she fully intended to return, which she did.
The IPPR has found no case of a man being denied a mortgage after having a baby. And yet, like mothers, men often change their working hours when they become fathers. The presumption that mothers won’t return to work is not born out of evidence. In fact, on average, British women now return to work after six months’ leave.
I put the issue of women being rejected for mortgages while on maternity leave to Lewis. “There are less humans involved in the decision-making process,” he says. “You are not a person, you are a number. When filling out a mortgage application, you are asked to state your current earnings, if you are on maternity that will be less and you aren’t going to get the full amount. The way people apply– the form – needs to be adjusted so it doesn’t penalise women on maternity.” This is a really important point, sometimes what needs to change is as simple as a form, but those changes aren’t being made because, like a lot of technology, it has been designed with men as the default user.
It’s not just consumer products like mortgages, pension and loans where women aren’t getting the same treatment as their male counterparts; female-led businesses are not being financed at the same rate as men, which has led to the coining of the term ‘The Financing Gap’. We can name more British female entrepreneurs – Mary Portas, Peanut’s Michelle Kennedy and Nubian Skin’s Ade Hassan – yet there is still a huge disparity between the number of men and women going into business; in the UK only 27% of businesses are majority-owned by women. In 2016, 91% of investment was given to companies without a single female founder.
The stats reveal how much underfunded talent there is. Although Women Entrepreneurs UK says that “applications for business loans for women are considered more favourably than for men” the real issue is how few women are applying for them. Banks and investment firms have much work to do in addressing this unbalance – they need to study and react to the lack of women coming forward for business loans and funding, they need to be asking, “What do we need to change?” While there are cultural barriers stopping women from starting businesses – like that pervasive feeling that business is a man’s game – it’s even more necessary that banks assess how they’re servicing new business and how their internal line-up is affecting the customers they’re attracting.
So how can more women empower themselves around money? How do we bust the myth that women ‘fritter’ away money while men ‘build assets’? Emilie Bellet, author of the new book You’re Not Broke, You’re Pre-Rich, says, “Accept that you’ll never understand everything about finance. No one will. But that doesn’t mean you can’t start investing.” Elizabeth Uviebinené, co-author of Slay In Your Lane, shared her best piece of advice, “Someone once said to me that you don’t get what you deserve a lot of the time when it comes to earning money, instead you get what you negotiate. Don’t be afraid to speak up and negotiate if things aren’t right the first time.”
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If we accept the effect that decades of discrimination have had on women, we can start to fight it. There is a lot we have to push back against – plenty of people still alive were brought up in an era where women did not earn money and a third of millennials grew up in a household where their mum didn’t work. Even if financial equality was taught in theory, it wasn’t modelled at home. I’d like to see more women challenging outdated stereotypes. Don’t hide purchases from your partner, be proud of what you earn and spend. If you think money isn’t a topic for you, there’s even more of a reason to educate yourself – go and ask your most sensible friend, male or female, what they do with their money. It’s 2019, you’re not thrifty, you’re thriving. Believe it.
Alex Holder is the author of Open Up, The Power Of Talking About Money (£12.99, Serpents Tail)
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