Annabelle Williams - Why Women Are Poorer Than Men and What We Can Do About It

Annabelle Williams is a journalist and editor who specialises in investing, economics and consumer affairs. Previously a columnist at The Times, Williams has appeared on live TV, radio and panel debates talking about her passion for the finance inequality between genders.

Why Women Are Poorer Than Men And What We Can Do About It is her first book.

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First published by Michael Joseph 2021

Copyright Annabelle Williams, 2021

The moral right of the author has been asserted

ISBN: 978-0-241-43318-8

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To Elisa

Money gives you freedom. It will never buy you happiness, but having enough money allows you to have choices: over where you live, what you do for work and how you spend your free time.

Money is vital for womens independence. Over the past 150 years, women have fought for the right to own property, to inherit, to borrow and to earn. In 1918 in the UK, wealthy property-owning women over the age of thirty were given the right to vote. Poorer women had to wait until 1928. Access to money determined what women could do a hundred years ago, and it still does today.

The societal implications of how wealth is distributed are hugely important. Who has money today and how much of it they have has a bearing on the future of individuals, communities and society as a whole. Actuaries can look at the levels of money-saving by different demographics and use it to predict what society will look like in thirty years time. How wealth is shared across a nation speaks volumes about that cultures values. It reflects who policymakers care about and whose concerns they choose to ignore.

In every part of our lives that touches on money women are financially disadvantaged, from work to state benefits, from savings to childcare and entrepreneurship. Essentially, its accepted as natural that women are poorer than men.

When I started out in financial journalism over a decade ago I became aware of a phrase thats often used in finance: women dont like risk. Its repeated in press releases and research reports put out by banks, financial advisers and asset managers and is used to explain why women are far less likely to have investments than men. Its also used to say something about female leaders and the way they manage companies. I found this notion that risk aversion is an inherent part of womanhood very odd. Moreover, none of the people I interviewed was able to explain exactly why this might be the case. It seemed clear to me that fewer women invest because they lack the money, the knowledge and exposure to the finance industry. Men vastly outnumber women at professional and managerial levels in investment and banking, so many women dont have mothers, sisters or female friends they can talk to about investments. As for female leaders and risk appetite, we can count on two fingers the number of women prime ministers there have been in the UK and, today, there are just six female CEOs in the FTSE 100 list of leading companies. They are the exception and under extra scrutiny because of their gender, and this combination of exceptionalism and exposure makes their position precarious. If they are more cautious than their male peers, it is no surprise why.

I began reading in my spare time about women and finance, the female relationship to money and womens economic position. It was fascinating, but also deeply complex. The idea that women dont like risk is overly simplistic and fails to take account of the socio-economic circumstances that many find themselves in.

So far, most of the conversation about women and financial equality has focused on the gender pay gap. Most people dont realize that women are poorer than men throughout their lives. Women save less, bear the brunt of cuts to social services and make up the majority of the elderly poor. Women hold fewer of the highest-paying jobs, are less likely to invest their money and are held back financially by providing literally thousands of hours of free labour during their lives. Even among the super-rich, wealth isnt distributed equally. In 2020 the media celebrated a record number of women making it onto The Sunday Times Rich List of Britains 1,000 wealthiest people. There were just 150 women. Only a single Black woman made the list: Valerie Moran, a technology entrepreneur.

Female economic inequality goes back hundreds of years and, despite decades of legislation, women today are facing the same issues that their grandmothers did. The seeds are sown when girls are of school age, when their choices about what to study are often shaped by gender norms rather than by thoughts about their future financial security. Once in the workplace, unconscious bias proves a barrier to progression and women in many industries struggle to increase their seniority. Globally, women hold only 34 per cent of managerial roles.

There is no country where women in work collectively earn as much as men for their labour. Across Europe and Australia, women earn an average of 1819 per cent less than men and the pace of change is so slow that, according to the World Economic Forum, it will take 257 years for the gap to close. During her working life, the typical British woman will earn 223,000 less than the average man, while for an American woman the figure is half a million dollars. Pay gaps are worse for women of colour, with Pakistani and Bangladeshi women earning an average of 26 per cent less than white British men. The gender pay gap is a big problem, but by looking at salaries through the prism of gender we see only one aspect of female wealth inequality.

Sometimes economic inequality is blatantly obvious. Flip through the pages of a newspaper and see how many female experts are quoted talking about business, finance or tax. The absence of womens voices in these areas speaks volumes about our economic position. At other times, its harder to spot, such as the pink premium added to anything from toiletries to stationery and toys marketed at women and girls, while identical products branded for men and boys cost much less. A mans dollar has greater buying power.

Economic inequality is present in the small things, such as the tax on tampons that has been charged by countries as diverse as India, Australia and Spain. Its also in the big things: female entrepreneurs face sexist scrutiny in the boardroom, and only one penny in every pound of venture capital funding goes to start-ups run by women.

This inequality is exacerbated by male-dominated governments who make decisions about tax and welfare policy without considering the gendered effects of their actions. One of the clearest examples is when governments decide to cut budgets for healthcare and state support cuts that largely affect women because they are more involved in caring roles and are more reliant on state support. In the UK, the slashing of budgets for social services and social security since 2010 has cost women 79 billion, compared to 13 billion for men.