Financial independence means having enough savings, investments, and cash on hand to afford the lifestyle you want for you and your family. An important goal for many people. However, a woman’s financial journey is not the same as a man’s.

According to the Financial Conduct Authority’s Financial Lives survey:

• More women (21%) than men (12%) lack confidence in their own ability to find financial products and services that are right for them.
• More women (24%) than men (17%) said they do not have a good understanding of how much financial products and services cost.

Research from Fidelity’s latest ‘Women and Money’ research shows that just over half of UK women (51%) feel financially independent, and just over a third (34%) call themselves financially confident.

It’s expected that by 2025, more than 60% of the UK’s wealth will be in the hands of women. So why aren’t women taking more control of their finances?

In this article, we highlight some of the challenges women may face on their financial journey, and share strategies for managing and growing wealth.

Why is it important for women to be financially independent?

Women often face unique challenges in achieving financial independence. From the gender pay gap to career breaks for caregiving, these factors can affect their career growth, salaries, and pension pots.

Here are some reasons why financial independence is important for women:

1. To overcome financial barriers

Although it’s declining, the gender pay gap means women continue to earn less than men over their careers, affecting their financial wellbeing. Taking longer breaks for motherhood or caregiving can also set back career progression, impacting income and financial stability.

2. To build a secure future

Women tend to live longer than men, meaning they’ll likely need a bigger pension pot for a comfortable retirement. According to data from the Pensions Policy Institute, women would need to work an extra 19 years to retire with the same pension pot as men. Find out how much you might need to enjoy your golden years with our modern-day financial planning for retirement guide.

3. To deal with life’s changes

Life is unpredictable, but financial independence provides a buffer against unexpected events. Take the COVID-19 pandemic, for example. This had a significant effect on women as they shouldered more of the burden of lockdowns, illness, and school closures.

4. To achieve a sense of freedom and empowerment

Financially independent women enjoy greater flexibility in their career choices and personal lives. They make decisions on their own without depending on others. This independence creates a sense of security and self-belief, enabling them to navigate life's uncertainties with confidence.

Seven financial empowerment strategies for women

1. Plan ahead for the menopause

It’s helpful to understand the financial implications of different life stages, such as the menopause, which can coincide with peak career demands. According to research data from myTamarin and Bupa:

• The menopause negatively impacts 6 in 10 women.
• For 10% of these women, the impact is debilitating.
• Each year, almost 1 million women in the UK leave work due to the menopause.

Consider how changes in your career or work schedule might affect your income. Do you need to start putting extra funds into your pension pot to compensate for periods of not working? Have you reviewed your savings strategy to ensure your money is working as hard as it can?

Even if the menopause feels like a long way off for you, being proactive and making small sacrifices now will benefit your future self.

2. Prepare for a comfortable retirement

Regularly review and contribute to your workplace pension scheme, taking advantage of any employer contributions on offer.

Consider making additional contributions to grow your pension savings. Explore other savings options, such as high-interest savings accounts or self-invested personal pensions (SIPPs), to enhance your financial security in retirement. It’s important to check you’re eligible for FSCS protection when depositing money into a savings account to keep your cash secure.

3. Explore investment options

If you want to grow your money but aren’t comfortable with the risk that’s often associated with investing, building a diversified portfolio could be a good strategy for you. A diversified portfolio includes a mix of asset classes, such as cash, stocks, bonds, and property. The aim is that if one investment underperforms, your other assets will help to offset any losses. Instead of relying on one type of investment, you’re spreading your level of risk to improve stability across your portfolio.

If you have a lower risk tolerance when it comes to your cash, a high-interest savings account is a risk-averse approach to helping you grow your money, while providing a strong level of protection.

4. Negotiate your salary with confidence

A reluctance to negotiate a higher salary is a contributor to the gender pay gap. Boost your confidence and bank balance by mastering the art of negotiating your salary.

Ahead of any salary conversations, do your homework – research industry salary standards and be prepared to articulate your value. Practice negotiation scenarios with a mentor or trusted colleague to fine-tune your pitch.

Think beyond cash. Consider any non-monetary benefits, such as flexible work arrangements and childcare reimbursement, as part of your negotiation process. It's not just about the pay check, it's also about creating a work-life balance that suits you.

5. Build an emergency fund

Life is unpredictable, so it pays to prepare for unexpected events. Whether it's divorce, bereavement, or redundancy, having a financial safety net can make all the difference. An emergency fund is money that's been set aside to cover these types of events. 

Here are four simple steps to help you build an emergency fund:

1. Consider saving three to six months' worth of living expenses in your fund.
2. Make it easy by setting up automatic monthly transfers, treating it as a non-negotiable priority.
3. Keep the fund separate from your current account. This helps you track how much you’ve saved, avoid accidentally spending any savings, and earn interest.
4. Regularly check and adjust the size of your fund as your financial situation evolves.

An emergency fund is an essential part of your financial wellbeing. It gives you peace of mind that if life throws you a curveball, you've got a solid plan in place. Our cash deposit platform can empower you to effortlessly grow your ‘rainy day’ fund. When you open a Flagstone account, you gain access to a range of high-interest savings accounts and exclusive rates, to maximise your money.

6. Grow your financial knowledge

Knowledge is power, so the saying goes. And empowering women with financial knowledge is a key component in effectively managing finances.

Financial literacy involves understanding money matters and making wise decisions about your finances. Without it, you might struggle with things like debt, overspending, not saving enough, or making poor investment choices.

Those who are financially literate are able to use their knowledge and skills to manage their money, reach their financial goals, and lay a strong foundation for their future.

Here are five simple ways you can improve your financial literacy:

1. Subscribe to financial magazines or newsletters from trusted financial sources, such as the Financial Times or Money Saving Expert.
2. Listen to popular money podcasts, such as This is Money, Planet Money, and Freakonomics Radio.
3. Read finance books, such as Girls That Invest and Girls Just Wanna Have Funds.
4. Sign up for a finance class, webinar or workshop.
5. Use finance management tools and apps, to help with tracking and budgeting.

7. Talk to a Financial Adviser

Connecting with a Financial Adviser is a key step for women seeking financial empowerment. It's like having a personal mentor to help you set and reach your financial goals, whether it's saving for retirement, investing, or managing debts.

A Financial Adviser provides practical financial knowledge, making complex money topics more understandable. They can work with you to create a customised plan that fits your unique situation, ensuring that your decisions are well-informed.

Beyond the immediate financial gains, this support can also contribute to improving your financial wellbeing, giving you the skills to handle your finances with confidence. Explore the range of Financial Advisers available to pinpoint your perfect match.

Why save with Flagstone?

If you’re feeling empowered to take action towards your financial goals, consider whether you’re getting the most out of your savings. If your cash is sitting in an instant access account for convenience, you may not be seeing the return on your loyalty. Now could be an opportune time to look for alternative options that are offering more attractive rates.

As the UK’s leading cash deposit platform, Flagstone lets you both protect your cash, and maximise its possibilities. Here are some of the benefits of opening an account with us:

1. Maximise your interest: Grow your cash with exclusive rates from 60 banks and hundreds of savings accounts.
2. Protect what’s yours: Split your cash between banks, for maximum FSCS protection on your deposits.
3. Escape the paperwork: Access hundreds of rates with a single application, and manage your savings with one password.
4. Stay in control: Our platform is open and available 24/7. So you can manage your portfolio any time, from anywhere, at a moment’s notice.
5. Secure your data: We protect your sensitive data with industry-leading Transport Layer Security (TLS). So you can take care of your cash, while we take care of your information.

Try our cash deposit calculator to see how much more money you could be earning.

This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.