A new generation of ‘money mummies’ – with younger women now broadly holding the balance of power when it comes to managing household finances – is emerging across the country, according to the latest findings from the Lloyds TSB Family Savings Report.
In particular, among couples aged under 45:
> For the first time, women are taking charge of the majority (52 per cent) of choices of financial provider, of long-term planning activity (52 per cent), as well as continuing to handle most of the everyday financial management such as bill payments (54 per cent).
> At the same time, younger couples are splitting financial research and information-gathering exactly 50-50.
> But modern ‘money mummies’ aren’t making a big show of it – in couples aged 25-44, men are still doing most of one activity, and that is giving out financial advice to others.
However, for couples who are aged over 45, men still hold sway in financial matters, albeit narrowly. This means that overall equality in financial decision-making for women in the UK is still around a decade away.
In fact, on the basis of this evidence and previous research in this area, it is forecasted that women will gain the overall ‘balance of power’ in all UK households’ financial decisions by the year 2020.
The research also suggests that there is an association between female control of household financial planning and significantly higher rates of saving. Nine out of ten (91 per cent) of households, where women are in charge of the long-term financial planning, have some money put by, whereas in households where the man takes on this responsibility, it is only four in five (82 per cent) that save. In households where neither partner plans, only about half (56 per cent) have savings).
International comparisons of these results show that younger German women are leading the way – with around 58 per cent controlling financial activity among younger couples.
However, in China, the picture is much more mixed. While older generations of women have more financial power than their European counterparts, there is no clear trend toward rising female financial power in the Chinese age groups. On some measures, men are actually more powerful among younger couples than older couples.
Greg Coughlan of Lloyds TSB said: “Younger women have definitely taken a firm grip on the purse strings, moving from the traditional role of managing the day-to-day spending, to planning and selecting where money is kept.
“This rise of a money matriarchy marks not just a shift in the balance of power in families but may have more positive impacts for the future economy.
“Female control of the family purse strings is likely to give rise to an increase in households’ savings, as women tend to be more cautious savers in terms of the vehicles they save in, and have a longer-term orientation to saving.
“This in turn means that mortgage repayments and consumer spending could become less vulnerable to turmoil in employment or financial markets in future”.