02.03.2021
The financial reality for women: Heavy dependence ongoing
The financial reality for women: Heavy dependence ongoing
- 30 per cent of women are today dependent on financial support
- Financial independence is a very important matter for three quarters of all women
- 27 per cent of women would invest more in securities if they knew more about them
- 30 per cent of women are today dependent on financial support
- Financial independence is a very important matter for three quarters of all women
- 27 per cent of women would invest more in securities if they knew more about them
The sad financial reality: The finances of women in Austria are not in the best of shape. Women earn 20.4 per cent less than men, their part-time quota is 47.7 per cent, while the average old-age pension for Austrian women is just 1,064 euros a month – well below the poverty line of currently 1,259 euros a month. Gerda Holzinger-Burgstaller, CEO of Erste Bank: ‘The many factors that set women in Austria at a disadvantage to men have unfortunately meant that we really need to attend to the financial health of women in this country.’
The sad financial reality: The finances of women in Austria are not in the best of shape. Women earn 20.4 per cent less than men, their part-time quota is 47.7 per cent, while the average old-age pension for Austrian women is just 1,064 euros a month – well below the poverty line of currently 1,259 euros a month. Gerda Holzinger-Burgstaller, CEO of Erste Bank: ‘The many factors that set women in Austria at a disadvantage to men have unfortunately meant that we really need to attend to the financial health of women in this country.’
Given the 4.49 million women living in Austria, these problems need to be actively addressed. Holzinger-Burgstaller: ‘It is unacceptable that women should be the ones primarily responsible for child-raising in Austria, but that this results in shortcomings in the insurance processes, reflected in lower pensions and a higher risk of poverty.’ Equal Pension Day 2020, for example, fell on 30th July – the day men receive the same amount of pension women have to wait until the end of the year to receive. In other words, women receive on average 42 per cent less pension than men.
Holzinger-Burgstaller: ‘Particularly in light of the differing professional lives, involving extended maternity leave, part-time work and the resulting gender pay gap, women need to set themselves up better financially and make provisions for the future. It is important that they themselves actively attend to their financial health. And, given Austria’s divorce rate of over 40 per cent, they should not rely on a partner either.’
Given the 4.49 million women living in Austria, these problems need to be actively addressed. Holzinger-Burgstaller: ‘It is unacceptable that women should be the ones primarily responsible for child-raising in Austria, but that this results in shortcomings in the insurance processes, reflected in lower pensions and a higher risk of poverty.’ Equal Pension Day 2020, for example, fell on 30th July – the day men receive the same amount of pension women have to wait until the end of the year to receive. In other words, women receive on average 42 per cent less pension than men.
Holzinger-Burgstaller: ‘Particularly in light of the differing professional lives, involving extended maternity leave, part-time work and the resulting gender pay gap, women need to set themselves up better financially and make provisions for the future. It is important that they themselves actively attend to their financial health. And, given Austria’s divorce rate of over 40 per cent, they should not rely on a partner either.’
Women save for their children, men for their partners
Women tend to place more importance on saving than men do. For instance, 54 per cent of women say saving is ‘very important’ to them, while only 49 per cent of men share this opinion. While women most commonly put money aside for their children (55%), grandchildren, godchildren or other children who are not their own (31%), men more frequently save money for their partners (47%). The coronavirus pandemic has also seen a considerable rise in saving quotas over the last twelve months.
Women focus on security According to Thomas Schaufler, Director of Private Customer Business at Erste Bank, ‘saving is firmly rooted as a core part of human nature, but gender difference becomes apparent when it comes to product choice. Women prefer to have more security when investing, while men are more open to taking risks.’ Despite the zero-interest phase and inflation, Austrians still primarily opt for savings accounts (women 76%, men 71%), building-society savers (women 59%, men 50%) and life insurance (women 47%, men 48%). But study results have shown that only 36 per cent of women, but 40 per cent of men, use securities. ‘It is pleasing to see that 27 per cent of women and 30 percent of men would invest more in securities if they knew more about them. There is now a major rethink happening in this area, and Austrians realise that, in a low-interest phase like the one we have been in for years, savings accounts are squandering valuable money’, says Schaufler, who adds that ‘2020 saw 55,000 securities accounts opened with us, with the volume increasing to 27 billion euros. We were able to acquire 26,000 new securities customers in total last year.’
The savers lose and the investors win
Unfortunately, the low interest rates these days mean savings accounts no longer earn you money, and this is evidenced by a comparison. A ten-year investment of 10,000 euros in a savings account earning 0.28 per cent interest ends up as a nominal amount of 10,282 euros. Further taking into account the average inflation of 1.64 per cent over the last ten years, the real value of the savings is only 8,633 euros. ‘These days, the only way investors can expect to earn money or be protected from inflation is through securities’, says Schaufler. Fund savings plans are a recommended option as an introduction to the world of securities.
Disclaimer: Please note: Investing in securities involves both opportunity and risk.