Are women gaining more financial independence?

Financial independence. Two words to describe… what, exactly? 

Living mortgage-free? Being able to book a last-minute European city break on a whim? Or simply not feeling an overwhelming sense of dread when an unexpected bill plops through the letterbox? 

For almost two in three women (64%) who took part in this year’s Fidelity International Women and Money study¹, it means having a personal income which doesn’t rely upon support from anyone else. 

The study found that just over half (53%) of women now feel financially independent - a higher number than at any other point in the last three years. But while that’s encouraging, it isn’t the whole story. The proportion of men feeling they have similar financial freedom has risen to 64%, suggesting the gender finance gap has widened for the second year in a row.

Of the women who don’t feel financially independent, many say they rely on their partner’s income. And more than half have found themselves unable to make their own life choices as a result.

Ultimately, then, financial independence is about having options.

Five steps to taking control

Not sure where to start? As Claire Dwyer, Head of Investment Companies at Fidelity International, explains, “While you may not be able to increase your level of income immediately, you can take steps to understand your spending patterns and manage your outgoings. Similarly, you may not be able to reach your ultimate savings goal overnight - but starting to make small contributions on a regular basis can make a significant difference over time.”

1.    First, take care of your debt

Debt can get expensive. Really expensive. That’s because credit cards and personal loans often come with high interest rates. 

If you can, prioritise paying off your full credit card balance each month. If that’s not realistic right now, pay off as much as you’re able, which will let you clear your debt sooner. It’s also worth keeping note of when your payments are due, as overdue payments can dent your credit score.

2.    Build an emergency fund
Life comes with surprises - some good, others not so good. A popular rule of thumb is to have about three to six months’ worth of your usual salary stashed away for emergencies. One way to do this is to open an easy-access savings account, which you can add to through regular contributions or one-off payments.

You might also consider speaking to a financial adviser. They could help you to understand how best to achieve your goals, while tackling some of the more complex areas of financial planning.

• Learn more about financial advice 

3.    Know your budget

Drawing up a budget takes a bit of time and energy, but it’s an excellent way to help you meet your financial goals. It also helps you to understand your spending habits. 
It’s worth looking through your bank statements to see where your money’s going. This way you can keep an eye on your regular expenditures, be conscious of any impulsive purchases and see how much you’re saving and investing. You might also spot some unnecessary subscriptions that you could cancel.

4.    Save and invest

It’s sensible to set aside a portion of your salary each month for savings and investments. If you automate this and set up a regular direct debit, it could prevent you from spending that money on other things. 

There are lots of ways you can save. You could set up a savings account with a bank or building society. If you’re looking to save in a tax-efficient way, a Stocks and Shares ISA might be worth considering. It allows you to save up to £20,000 each year and contribute as little as £25 a month.

• Use our ISA calculator to see the power investing can have over time 
• Learn more about our Stocks and Shares ISA 

5.    Boost your workplace pension

In most cases, your employer will make monthly payments into your pension for you, and you’ll also pay contributions directly from your salary. But there are other ways you can build up your pension savings more quickly. 

These include checking whether your employer will match your contributions if you increase the monthly amount you pay in. You could also consider a one-off payment to your pension if you’re able to – for example, from a work bonus.

• If you’re self-employed and not started saving for your retirement yet, think about opening a Self-Invested Personal pension. Future you will thank you for it.

¹ Research was conducted by Opinium Research commissioned by Fidelity International. The survey is based on responses of 2,000 UK adults and was carried out between 14th and 27th May 2024.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028).This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of  Fidelity’s advisers or an authorised financial adviser of your choice.