Financial insecurity is taking a toll on women’s mental health, expert says

It’s been a week since Equal Pay Day – the day when women in the UK effectively begin working for free for the remainder of the year due to the gender pay gap.

Put simply, the gender pay gap is the average difference between how much men and women make for doing the same job and in the UK the gap is sitting at a steady 14.1 per cent.

But this could actually be taking a toll on women’s mental health.

Liz Walker, HR director at Unum UK – a leading employee benefits provider – spoke to the Standard and revealed that the pay gap has a ‘profound effect’ on a woman’s independence, resilience to financial shocks and preparedness for the future.

She added: “The Chartered Insurance Institute’s recent report on Women’s Risks in Life revealed that women are more likely to report feeling financial insecure than men, linked to both lower levels of income and lower levels of savings.”

There has long been a link between financial insecurity and mental health in women, something that has been recognised by the Money and Mental Health Policy Institute.

Liz, who has spearheaded work to remove the stigma of mental health in the workplace, explained: “Understanding that women, in general, are lower earners, have less in savings, are less likely to hold leadership positions, and feel more financially insecure than men – I think it’s safe to assume that this link is even stronger in women.”

Why does financial insecurity take a toll on women’s mental health?

Unfortunately, money really is what makes the world tick. You need money to put a roof over your head, to feed yourself and dependents, to take care of your elderly relatives, to take care of your health – the list is endless.

Money worries can take an emotional toll on anyone, but with the gender pay gap meaning women earn less on average, this can lead to emotions like anxiety, low self-esteem, anger, frustration, fear, guilt, shame and can also aggravate other mental health conditions.

How can women combat financial insecurity?

Liz advised that women can educate themselves as much as possible on how to best plan and manage their finances and take advantage of benefits from employers.

She continued: “Don’t miss out on financial education at work. Currently, almost half of UK employers offer this, with 20 per cent planning to introduce it in the next year and a further 7 per cent will do so in the next 3 years. Keep an eye out for open events your company may be holding, like workshops or one-on-ones with professional financial advisors and try your best to attend.

“Understanding financial protection products like Income Protection, Critical Illness, and Life insurance can help women feel prepared for the unexpected and this alone can improve mental wellbeing.

“Also, women should make the most of financially-focused employee benefits. Many employers offer these, but it’s up to you to research what’s on offer and to ask the right questions to help you make the best financial decisions.”

With a quarter of the UK workforce admitting to being financially insecure, you should never be afraid to speak up.

“Conversations are still very rare about personal finances – especially at work,” Liz explained.

“Lead the way in breaking down barriers and work with your boss to promote an honest and open dialogue in your workplace about different experiences of mental illness and financial insecurity. As the stigma of mental health problems is getting more corporate recognition, the link between money and mental health should be a natural progression of the conversation.”

If financial insecurity is taking a toll on your mental health, don’t be afraid to talk to a trained professional about it or even visit a finance specialist who can help you set out a budget. Better budgeting will help you increase your savings which will lessen feelings of money-related anxieties.

Liz added: “Be proactive when it comes to savings schemes on offer at work and consider Workplace ISAs, Save As You Earn (SAYE) and Share Incentive Plans (SIPs). Also, consider taking professional advice - a recent study from Fidelity shows around half of women will make unilateral financial decisions without consulting financial advice professionals because of a lack of confidence. Just a third of men would do the same.”

While money is a tricky beast, the key is education and knowing you are never alone.