There’s no evidence women are worse with money. So how do we tackle the growing gender debt gap?

It’s long been the case at StepChange Debt Charity that we get more women than men turning to us for help. Yet it’s a trend that has crept up further and further in recent years. So why does this ‘gender debt gap’ exist, and how can it be addressed? 

With International Women’s Day coming up on 8 March, it’s salutary to remember that not only are women more likely to seek debt advice, but that when they do, they are more likely to have a negative budget, with no ability to start repaying their debts, as well as being more likely to be behind on essential household bills. That doesn’t feel much like equality.

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Last month we convened a roundtable of experts, chaired by Baroness Nicky Morgan, to consider the issues, and begin to build more insight on how they should be tackled. It’s clear from the discussion that the reasons for the higher prevalence of debt problems among women are complex and intersectional.

It’s worth noting that there’s no evidence of women having poorer skills or being “worse with money” than men. Conversely, though, there’s a great deal of evidence that where caring responsibilities exist, it is more likely to be women undertaking them, bearing the cost of them, and consequently finding themselves in situations where it is more difficult for them to take job opportunities, build savings, or invest in long-term pension provision.

We should also bear in mind that it’s entirely possible that women may be more inclined to seek help for problems, in line with the old trope about men never asking for directions. The fact is though that those of our clients who are single parents with childcare responsibilities are disproportionately women, and single parents do face unique financial pressure. 

Women carry a ‘disproportionate financial burden’

There are some thorny questions for policymakers to grapple with in terms of how to improve this situation. Not only is it vital to continue to close the gender pay gap, but also to recognise that the prevailing environment is one in which women still carry a disproportionate financial burden, and lower lifetime incomes, aligned with the fact that caring responsibilities remain unevenly distributed across the genders. 

In this day and age, we shouldn’t be satisfied with anything less than genuinely equal financial opportunity for all – but this means facing up to the structural imbalances that affect women. Equal pay for equal work doesn’t even get close to unpicking the complexities that still see women overall so much more likely to experience financial hardship.

In the short term, making sure that women are accessing any relevant benefits is a crucial first step, given the known level of under-claiming. But over the medium to long term, we need to cover the much bigger questions of lifetime earnings, pensions, opportunity costs and the financial impact of caring if we are to get to a point where the gender split between debt advice clients is broadly close to the profile of the wider population.

Vikki Brownridge is the chief executive of StepChange Debt Charity.

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