personal finance

What women want their financial future to look like

This article is the latest part of the FT’s Financial Literacy and Inclusion Campaign

International Women’s Day should be a day of celebration but, as a financial journalist, I confess it is often one tinged with dread. When it comes to women’s finances and career prospects, how much has really changed for the better in the intervening 12 months?

Not anywhere near enough, judging by the depressing headlines on Friday. For starters, MPs on the House of Commons Treasury select committee have called out persistent “sexism in the City” for women working in finance — a scandal the Financial Times’ fearless investigations team has been exposing for years.

It’s depressing, though it does make me feel lucky to work with so many wonderful men (and women!) at the FT. We had our work cut out this Budget week covering what could be the chancellor’s last big fiscal statement before the next general election and, thankfully, there were some positives for parents struggling with the exorbitant cost of childcare (more of which later).

However, analysis of the tax cuts from the Women’s Budget Group think-tank suggests that single men will gain on average nearly £500 more a year than lone mothers, who are more likely to work in lower-paid jobs and struggle to access affordable childcare.

It’s fantastic that the chancellor has committed more funding to the rollout of flagship childcare reforms. But the sad truth is this will not help everyone.

“The UK’s childcare system simply does not work for families on low incomes,” was the blunt assessment of Joeli Brearley, founder of campaign group Pregnant Then Screwed, speaking at an International Women’s Day event put on by the FT’s Financial Literacy and Inclusion Campaign. The percentage of income these families would need to spend on childcare makes it uneconomic to work, she said, trapping them in a cycle of poverty. If this government will not tackle the problem, she hopes the next one will.

“If you don’t have granny day care, there’s no other option,” added fellow panellist Anna Whitehouse, the writer and broadcaster better known as Mother Pukka, referencing data from SunLife that more than half of grandparents now care for their grandchildren during the working week.

Older women are more likely to take on unpaid care than older men, compounding the effects of the gender pay and pensions gap that are never far away from the conversation on International Women’s Day.

Whitehouse is behind the #flexappeal campaign for flexible working for all. The possibilities this unlocks have been one of the biggest positives to emerge from the pandemic. Yet doom is never far away — Boots is the latest company reported to be reversing flexible working policies.

The “emasculation of flexibility” is also a problem — it’s important to stress that flexible working isn’t just for women (or for parents).

In our free-to-watch webinar, we tried hard to concentrate on the positives. Recruiters have told Whitehouse that if one company ends its flexible working arrangements, they know it will be easier to tempt their top talent to work for one that does.

Other firms are selling the virtues of flexible working, including Deloitte, which has produced information packs she likened to Top Trumps cards showing how its staff are working flexibly, empowering new recruits to ask about it during interviews.

Maike Currie, architect of Hargreaves Lansdown’s Financially Fearless campaign to get more women investing, stressed employers were alive to the staff retention benefits of such policies. She argues that investing in better childcare and flexible working will boost the UK economy.

“In the conversations I have with ministers about childcare, I am seeing a complete narrative shift,” added Brearley. “Five years ago, they’d look at me like I had two chocolate fingers stuck up my nose — why should we care about childcare? Now, it’s seen as the key battleground for the next election.”

I felt these sentiments in chancellor Jeremy Hunt’s Budget speech on Wednesday. The FT has reported the distorting effects of the £50,000 threshold where child benefit starts to be removed, including parents working less or turning down overtime to avoid ridiculously high marginal tax rates as their benefits are clawed back.

By raising the threshold to £60,000 from April 6 and extending the taper to a ceiling of £80,000 for the highest earner, Hunt claimed child benefit reforms would lead to an increase in hours worked equivalent to about 10,000 more people entering the workforce full-time.

However, if you’re one of nearly half a million families who will now be entitled to claim something, there’s a risk that hours of your own time could be wasted by the faffadoodle of applying.

In the spirit of positivity and collaboration, HM Revenue & Customs has helped me clarify the following about the claims process.

Only one parent can apply for child benefit. If one partner is not working, it should be them, as they will then receive national insurance credits towards their state pension.

The fastest way to apply is by using the HMRC app. But you would be wise to do so on or after the start of the new tax year, which is when the new child benefit thresholds kick in. “If you make a new claim or opt into payments on or after April 6 2024, backdated payments won’t be based on the 2023-24 threshold,” HMRC confirms.

However, if you submit a claim or opt into payments before this, you may attract a tax liability under the current system. This would mean you’d have to complete a tax return next year to pay back the excess.

Allow me one final moan. Promises to set up a system where pay-as-you-earn workers could repay excess benefits via their tax code are not yet ready — HMRC says “further details will be announced in due course”. So you may need to complete a tax return in future years.

The tax authority uses your adjusted net income to work out how much benefit will be tapered away. Simply put, this is your gross salary minus certain tax reliefs and pension contributions (a detailed child benefit calculator is available here). This means the higher-earning parent could make use of salary sacrifice to save more into their pension and keep more of their child benefit.

The enlarged threshold applies from April 6, which is also when child benefit payments increase. Parents will receive £25.60 a week for their first child and £16.95 for subsequent children — so, for a family with two children, this could be worth £2,212 a year.

Worth the hassle, I’d say — and if you’re juggling work with raising the next generation, I hope this makes your life slightly easier.

Claer Barrett is the FT’s consumer editor and author of the FT’s
Sort Your Financial Life Out newsletter series;; Instagram @ClaerB.

FT Flic’s True Cost of Childcare webinar is free to watch for the next 90 days if you register here.


This website uses cookies. By continuing to use this site, you accept our use of cookies.