Credit Management April 2024 issue

THE NEWS
CMNEWS
A round-up of news stories from the
world of consumer and commercial credit.
WRITTEN BY: SEAN FEAST FCICM
Women struggle more
with finances than men
WOMEN are suffering
most in the
financial squeeze,
according to the
latest figures from
credit management group Intrum.
A survey of 20,000 consumers across
Europe shows that people are spending
more of their income on essentials than
they did in the past. Banks recommend
following the 50-30-20 rule, suggesting
an allocation of half income to essentials,
30 percent to discretionary items and 20
percent to savings.
The financial crisis has made these target
figures challenging for consumers to meet,
with many struggling to stay afloat. On
average, UK consumers are now using 59
percent of their income to pay for essentials
such as housing, groceries and energy bills,
allocating 24 percent to discretionary
spending and saving only 17 percent of
their income.
However, when these figures are broken
down, the situation is significantly worse
for women. Women spend an average of
64 percent of their income on essentials,
compared with 53 percent for men. They
spend 21 percent of their income on
discretionary items, while men allocate 28
percent of their income to this category.
Savings figures show that women are only
able to put aside 15 percent of their income
on average, compared with 18 percent that
men can save.
Intrum UK MD Jim Appleby says the
financial crisis has exacerbated gender
inequalities when it comes to money:
“Women are spending less of their income
on luxuries and ‘nice to have’ items than
their male counterparts. They are also
saving less – something that has long-term
implications for financial wellbeing.”
Unsurprisingly, women are said to be
feeling more ‘downbeat’ about their earning
power than men. They are also more likely
to report that financial concerns are
harming their mental or physical health.
Almost half of women (49 percent) said
lack of money has made them deprioritise
their physical health – for example buying
cheaper food or cutting gym memberships
– compared with 39 percent of men.
In the last 12 months, 45 percent of
women say their mental health has suffered
as a result of worrying about their finances
and bills (compared with 37 percent of
men). Despite these challenges, women are
less likely to skip bills. When questioned,
16 percent of men in the UK said they
expected to skip at least one bill this year.
Only 10 percent of women said the same.
Ultimately, more than eight in ten
women are planning changes to spending
to cover the cost of living. Almost half of
UK consumers (45 percent) are thinking
about adding an extra job or side hustle to
manage in 2024.
“People are willing to work their way free
of problem debt,” Jim continues. “But there
is a feeling that even this won’t lead to the
same standard of living their parents had.
More than half of the people we spoke to
feel they will be less well off when it comes
to savings, property and pensions than the
previous generations.”
“Women are spending less of their income on luxuries
and ‘nice to have’ items than their male counterparts.
They are also saving less – something that has longterm
implications for financial wellbeing.”
Brave | Curious | Resilient / www.cicm.com / April 2024 / PAGE 6