Women move their finances to a higher league

They're richer and better informed than ever before - but old attitudes die hard. Esther Shaw investigates
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The Independent Online

After all, this certainly seems to have worked for the ex-wives who have received headline-making divorce settlements in a number of recent high-profile court cases.

But for all the clothes that alimony might buy, more and more women these days are opting for financial independence.

"There was a time when husbands did not involve their wives in the household financial affairs," says Caroline Anstee from Elements, a financial advice network for women. "But this meant women were very vulnerable and dependent on their partners as they had no assets of their own."

However, times are changing, and a dynamic generation of independent, well-educated, well-off women is now emerging, many of whom are choosing to pursue a career and stay single.

Among millionaires aged between 18 and 44, there are now 24 per cent more women than men, according to recent findings from the friendly society Liverpool Victoria. Its research also suggests that women will become the dominant sex financially, with the current 48 per cent of personal wealth in female hands set to rise to 60 per cent in the next 20 years.

This change will come about, says Liverpool Victoria, due to women performing better than men in secondary, further and higher education, and enjoying greater levels of home ownership and a longer life expectancy.

Women are also making their presence felt in the workplace, with the number in managerial roles up from 9.1 per cent in 2001, to 10.5 per cent last year.

At present, women's pay is still lagging behind that of their male counterparts, but the gap has narrowed significantly to just 12 per cent less, according to Marks & Spencer Money. As a result of this, adds Ms Anstee, more women than ever are keeping their bank accounts separate from their partner's.

The problem is, that while women are becoming more financially sophisticated, they are still less likely than men to seek professional advice. This is in no small part due to the shortage of female independent financial advisers (IFAs) in the UK, and because women often feel intimidated in dealing with a male adviser.

But advisers can no longer afford to treat female customers as being any less knowledgeable than men, says Anna Sofat, from Destini Fiona Price, an IFA that specialises in finance for women. "The industry is trying to move on from the idea of men giving the hard sell," she adds. "There are a lot more female IFAs coming through who are very well suited to the job."

Women IFAs often, for example, have better interpersonal skills than men. "They are more interested in talking face to face and building a long-lasting relationship," says Ms Anstee.

In terms of their financial affairs, women increasingly have a lot more disposable cash to play with. Recent findings from Investec Private Bank show that around 2.4 million women in the UK are now classed as being "wealthy" - holding more than £25,000 each in savings accounts.

Women also appear to be exerting more control over their long-term plans, such as mortgages and investments. Female customers now account for nearly a quarter of mortgages taken out, says M&S Money - up from just 10 per cent in 1983.

There is also evidence to suggest that women - and even those merely dabbling in the stock market with little knowledge or experience - actually make better investors than men.

Hoodlessbrennan.com - the online stockbroker - has evidence to show that women tend to build more balanced portfolios that yield long-term returns, taking a low-risk approach - in comparison with the higher-risk strategies that are more commonly favoured by men.

The problem is that despite their success in managing their finances, the gains made by women will always be fragile because of the need for many to combine a career with the demands of caring for children or elderly relatives. This can, for example, prove particularly detrimental in terms of pension planning, as many women struggle to build enough national insurance contributions to qualify for the full state pension.

That said, recent findings from the Department for Work and Pensions (DWP) suggest more wide-ranging reasons why women are failing to save enough for retirement. Pensions, the DWP says, are simply not a high priority for many women, who tend to be more concerned with spending money on their families.

Worse, researchers found traditional gender roles are still making many women financially dependent on male partners. This in turn has an impact when relationships break up: evidence suggests few women know how their pension entitlement would be affected in this situation. But married women cannot afford to ignore this issue, as in most cases, their husbands will have built up a larger pension than they have.

The good news is that, four years ago, legislation was introduced to allow the value of a pension to be split fairly in the event of a divorce.

However, Malcolm Cuthbert, director of the stockbroker Killik & Co, believes women are not using the new rules. "Pensions are still being overlooked in asset-splitting in divorce," he says. "Many women are missing out in receiving a proportion of their partner's pension pot, which they could invest to produce independent benefits."

But when it comes to financial protection products, the outlook is rosier. Recent findings from the broker LifeSearch show that more women than ever are buying life insurance, critical illness cover and income protection.

"We attribute this to growing awareness of the importance of protecting the financial stability of the family," says spokes-woman Linda Tyson.

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