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Consequences of Covid, Part Five: #AdviseHer special

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For financial professionals only

Consequences of Covid: #AdviseHer

The coronavirus outbreak has drawn stark lines between generations. Older people are categorised amongst the most vulnerable, and many are suffering loss, ill-health, and loneliness. But the impact of the virus has been felt strongly across other age groups, too. And the true costs to the economy, society and our future generations will only be known in time. 

In this series, we will explore the likely long-term financial impact for people at different stages of life, and where their advice needs will lie in years to come.

2020 will be remembered globally for the upheaval caused by the Covid-19 pandemic. The virus hasn’t discriminated against gender, race, class, or wealth. There have been exceptions where some people are more affected than others, but in the grand scheme of things, it’s impacted all of us in one way or another.

Clearly, men are at a disadvantage with higher mortality rates than women, but the knock-on impact on women is thought to be great due to the burden of additional care that falls disproportionately on them.

Women’s jobs at risk

Globally, women earn less, save less and have less secure jobs. While they step up to look after the sick and elderly, they’ve had the additional duty of caring for children who would otherwise be at school. These women in particular have seen their jobs at risk. A CARE International study reports that 55% of women reported losing their jobs or income during the pandemic compared with 34% of men1. The implications of this on the global economy are immense. It’s estimated that global GDP growth could be $1trillion lower in 2030 than it would be if women’s unemployment tracked men’s in each sector2.

Gender parity…no more

Before the pandemic, progress was being made globally, albeit very slowly, to improve gender equality. It was far from perfect as women and men tend to cluster in different occupations. For example, women are well represented in the hospitality, retail and arts industries. These sectors have been among the worst affected by the pandemic, and as a result, women’s jobs have been more at risk compared to men. This also means the work done to get men and women on an even footing in the workforce could go into reverse.

What’s more, women in senior positions are often held to higher performance standards than men3. These women have faced the same pressures at home with care giving responsibilities during the pandemic and are more likely than men at the same level to feel burned out with no ‘off’ switch. This is in large part thanks to homeworking arrangements blurring the boundaries between family and work life. Companies could lose such women due to unsustainable pressures and research shows the financial consequences could be significant. Company profits could be close to 50% higher when women are well represented in senior roles4. Senior women are also likely to have a meaningful impact on a company’s culture and embrace employee-friendly policies and champion gender diversity. It’s therefore vital these women are supported by their companies.

Opportunity knocks


When the sectors most affected by the pandemic reopen fully and demand recovers, so too will these jobs. In the meantime, this may give some women an opportunity to retrain in different vocations or even set up their own businesses. But, what can’t be underestimated is how Covid may force women to reassess their financial positions. Therein lies the opportunity for financial advice. Notwithstanding the jobs that may be lost due to Covid and the need for advice there, it’s also predicted that by the end of 2020, a higher percentage of the UK’s wealth will be held by women5, whether that’s due to divorce, inheritance or simply thanks to hard work. With only 36% of women seeking help from a financial planner compared to 46% of men6, that opportunity has only strengthened.

References

[1] CARE Rapid Gender Analysis 2020 – She Told US So – Rapid Gender Analysis: Filling the Data Gap to Build Back Equal – September 2020 [Downloadable paper]

[2] McKinsey.com 2020 Covid-19 and Gender Equality: Countering the regressive effects – July 2020 [online] Accessed at: https://www.mckinsey.com/featured-insights/future-of-work/covid-19-and-gender-equality-countering-the-regressive-effects# [Accessed 24 November 2020]

[3] Forbes.com 2020 Amy Klobuchar Says Women Are Held To A Higher Standard—What Does Research Say? – 2020 [online] Accessed at: https://www.forbes.com/sites/kimelsesser/2019/11/21/klobuchar-says-women-are-held-to-a-higher-standard-what-does-research-say/?sh=1b5370d7507b [Accessed 24 November 2020]

[4] McKinsey.com 2020 Women in the Workplace 2020 – September 2020 [online] Accessed at: https://www.mckinsey.com/featured-insights/diversity-and-inclusion/women-in-the-workplace [Accessed 24 November 2020]

[5] Centre for Economics and Business Research

[6] Unbiased.co.uk 2020 Be a woman with a financial plan – 2020 [online] Accessed at: https://www.unbiased.co.uk/news/financial-adviser/be-a-woman-with-a-financial-plan [Accessed 24 November 2020]



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