Younger women taking control of household finances

By UK CreditCards.com

Women are increasingly taking charge of family finances, new research suggests. A September 2012 study by Lloyds TSB indicates that women overall will have gained the balance of power by 2020. For women under the age of 45, the shift has already occurred. 

"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," said Greg Coughlan, head of savings at Lloyds TSB in a news release.

Study uncovers trend of "money mummies"
Women tend to be in charge of managing household finances in younger couples, according to Lloyds TSB's Family Savings Report. These so-called "money mummies" now make many of the important decisions when it comes to financial products. In just over half (52%) of couples under 45, women make the majority of the household's financial decisions and handle most of their families' long-term financial planning. In addition, 54% of bill payments and day-to-day financial management activities are performed by women in couples under the age of 45. money-mummies

The report also indicates that the vast majority of families are getting more active when it comes to financial planning, with nine out of 10 engaging in this important activity. Switching financial products has also become more common than before, with almost two-thirds of adults recently moving their savings to secure a better rate of interest and 53% now using price comparison websites to ensure they get a good deal. For younger couples at least, this financial research and information gathering is being divided 50-50.

Overall equality still some way off
While younger women have taken over the financial management reins in many households, there is still some way to go before females grasp power overall. In couples over the age of 45, men are more likely to retain control over their families' finances and make decisions about bank accounts, credit cards and other financial products and services.

In fact, despite the shift among couples aged 25 to 44, equality in financial decision-making across all age groups is not likely to be achieved for another 10 years, according to Lloyds TSB. Yet, when it does happen, the effects could be positive. Houses in which the woman takes the lead in financial matters are associated with higher rates of saving -- 91% of households where women are in charge have money put away, compared with 82% of houses in which men are in charge.

"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," Coughlan said. "This in turn means that mortgage repayments and consumer spending could become less vulnerable to turmoil in employment or financial markets in future."

See related: Expert Q&A: A personal finance site for women, Men splurge on cars, women on clothes: The Gender gap in credit card spending

Published: 5 October 2012