We are living in scary, unprecedented times. All of us have had to radically change our lifestyles, many of us are now working from home, a brave few of us are still out there, keeping the nation running smoothly. Coronavirus has changed everything, but, for probably quite a few of us, the pandemic promises to be life-changing for our finances.
That’s because, (if you’re in the mood for even MORE bad news) Millennial women will be among the hardest hit, financially, by this crisis. This is thanks to the fact that we disproportionately dominate in many of the most vulnerable sectors; the self-employed, those with children, those who are pregnant, those most recently hired and those working in low-paid industries and those most affected by closures.
The government has, over the last few weeks, rolled out the biggest national bailout since WW2, with unprecedented support for businesses and workers. But how far will this go to protect Millennial women, and just how will our finances be hit?
…if you’re self-employed
Millennial women are the fastest growing self-employed demographic. Millennials make up 30% of the self-employed workforce and research from IPSE (The Association of Independent Professionals and the Self-Employed) shows that female freelancers have been driving the rise in self-employment by 69% since 2008.
But self-employed women have already had it tough even before the coronavirus hit. It will not surprise any of you to hear there is a gender pay gap in the self-employed sector. Self-employed men earn 43% more for their work than their female counterparts, this is compared to a 17% gender pay gap among pay-roll employees.
“There are a disproportionate number of Millennial women in the gig economy,” observes Sam Smethers, CEO of The Fawcett Society, “They have no cushion of savings, they are highly vulnerable to losing their homes and their incomes over night.”
However, the good news is the government finally addressed the self-employed last week, announcing a grant that will allow you to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next 3 months, and which may be extended if needed.
“We have to acknowledge that this is in fact a very generous package that the government has put forward and one that will benefit millions of self-employed people. But it has some very sharp edges- it is like the government has created a box that a lot of people will fit into, but if you just miss out you don’t get anything.”
People who miss out are, for example Sally, 32, a video editor who only very recently went freelance, so has no tax return to make her eligible.
“They’ve now said they will let me file a return by 23 April, but I will only get 80% of that income and – considering I have only been self-employed for a short amount of time – that will be barely enough to live on.”
There is also the caveat that this grant does not kick in until June, which means that many of these self-employed women will have to rely on universal credit until then. Thankfully, the government has also updated this.
“If you were self-employed and applying for universal credit before, there was this mechanism called the minimum income floor which limited the amount you could claim,” explains Andrew, “The government has removed that – which is good news and means that you can now receive £94.20 a week.”
Andrew notes that, while this is not enough to cover most people’s bills, he advises self-employed women to also apply for Housing Allowance, which could get them £1600 a month via universal credit system, depending on their individual circumstances.
…if you’re on a zero hour contract
These pesky contracts are way more prevalent than you think among Millennial women. Roughly 54% of those working on zero hour contracts in the UK are women, and 36 per cent overall are younger Millennials.
“They are often working like that because they don’t have a choice,” explains Sam Smethers, “It’s not that they don’t want that protection; it’s that they need a job and those are the only structures available to them. In terms of wages, we have a low income equality anyway, workers in these types of jobs are often not getting the same minimum wage as people in the regular economy market anyway- so they are even more vulnerable financially.”
“I am still waiting to see what my employer will do re my zero hour contract,” says gym manager Lilah, 27, “It’s up to them whether I get furloughed or ignored.”
The government has still not fully responded to the difficulties facing zero hour contracts, something The Young Women’s Trust is actively campaigning to fix. In a statement they say: “We’re calling on the government to offer workers on zero hours contracts with the same provision as the rest of the workforce – 80 percent of their average earnings over the last three years. We also want to see the government bring benefits, including Universal Credit, Statutory Sick Pay and Personal Independence Payment in line with the National Living Wage of £322 a week.” We are expecting that this will be the next big issue the government will tackle, so stay tuned!
…if you’re employed
It may look like only self-employed Millennial women, or those on ‘flexible’ contracts, are in trouble. So how is this affecting the more conventionally employed?
The fact is, Millennial women are statistically more likely to be working in lower-paid jobs, even before this crisis. Most work in education (an estimated 1.8m) which means those not teaching key worker’s children will be affected by school closures, and could be among the many who are furloughed on reduced pay. There are also roughly 1.5m women working in both hospitality and retail sectors, many of which are Millennials, and many of whom will have lost jobs due to shop, restaurant, hotel, bar and pub closures. These will mostly be receiving 80% of their pay…which could have been lower than average to begin with.
“Millennial women are at the most extreme end of vulnerability not just because of their employment status, but because of where they are in the labour market,” agrees Sam Smethers, who does, however, see a possible silver-lining for those in more conventional office jobs: “The one positive we may see is the normalisation of working from home and flexible working and that can only benefit women- who typically are juggling childcare and have seen that as blocking career progression and promotion. Hopefully we will see this mean these higher-up jobs can be shaped in a way that suits women..”
…if you’re pregnant
Millennials are the generation most likely to be having children now, which means they are particularly vulnerable.
Joeli Brearley, of pregnancy discrimination advocacy group, Pregnant, Then Screwed, sees this as an especially onerous time to be with child. What hasn’t helped, is inconsistent advice from the government…
“The announcement by the prime minister on 16 March said that pregnant women were vulnerable – but where they stood legally on if they should go into work or not; was not clear,” Joeli says, “Some pregnant women were being told by their employer; well you still need to come into work and those who are saying they don’t feel safe, and are self isolating- many of these women are not being unpaid. That directly affects their maternity leave; because you can only access statutory maternity leave if you have been paid a certain amount of money while you are pregnant…”
“We have heard of redundancies happening with pregnant women – and them being put on furloughed leave really quickly ahead of other colleagues,” she explains, “A lot of clear-cut pregnancy discrimination is happening but, in this current climate, when everything is so chaotic, it is really difficult to challenge that. Employers are massively exploiting this situation and these injustices are slipping through the cracks.”
The good news is that organisations like Pregnant Then Screwed exist and, Brearley herself thinks that this situation will only serve to highlight the discrimination that happens everyday- putting pressure on legislators to make lasting change going forward.
…if you have children
Roughly 5.5million parents in the UK are Millennials but, as has been evidenced by the coronavirus lockdown, it is the female parent who is more likely to end up shouldering most of the caring burden for the children now home from school. As Joeli Brearley notes:” It’s barely mentioned that these millions of women, now unable to do their jobs, are picking up all the invisible labour yet again.”
This can have dire financial consequences for Millennial mothers- many of whom have had their hours cut: either themselves as a result of having to look after children at home, or because their employers have assumed they will be doing so- and cut their hours for them.
“A lot of employers have done that- which shows the bias against working mothers,” says Joeli Brearley, “The government’s furloughing system also doesn’t appreciate that working mothers will have been earning less part-time before this crisis -and so getting 80% of already reduced hours will be a huge hit.”
Brearley also reminds us that 90% of single parents are mums, and most of these with young children are Millennials: “We are getting a lot of panicked calls from single mums. They are looking after children and they can’t work. How can they buy food? Kids are not getting free school meals anymore…”
Brearley also notes that many parents are still hit with crippling nursery fees, despite the fact children are now at home: “A lot are being told they will lose their place if they don’t keep paying. There are only 60% provisions for childcare in London so it’s really hard to find a place.”
Also, if you happen to be self-employed AND a mum – like 611,000 self-employed women in the UK are? We’ve already seen how hard that will be, and those who have just come off maternity leave, will have a hard time providing that necessary tax return to make them eligible for the new grant…
Though it’s easy to see this as bleak, Joeli Brearley again says she’s hopeful it could prove a watershed moment… “I’m hoping this shines a light on the issues women face every day, and wakes us up to the realities of how imbalanced parenting can be.”
…if you started your own business
Millennial women are so often fed the dream of gaining that coveted (but deeply annoying) title ‘Girl Boss.’ But what if you did take that jump, and became an entrepreneur? How will Covid19 affect you?
“If you are a sole director of a limited company you can make use of the government’s furlough scheme,” explains Andrew Chamberlain, “But, 80% of your salary is going to be so low because your accountant will have previously advised you to pay yourself very small dividends.If you run your own company you will not do very well out of the government’s self-employed schemes.”
Sam Smethers agrees, and looks to that favourite Millennial company- the start up.
“Start ups generally have a very low income at the beginning, they are normally just on the margins of surviving, so if the government is going to give them 80% of their earnings but their earnings are basically negligible for the last five months, they are not going to get much at all,” she says, “We’ll find a lot of female entrepreneurs suffering as they are a week or two away from survival anyway…”
This is the case with start-up founder Sarah, 33, from London.
“I started my own company last year,” she says, “It was a huge leap for me, and something I worked really hard to achieve. Now I have basically nothing coming in. Almost overnight I am looking at the very real possibility of closing my business.”
Andrew Chamberlain advises applying for the government’s Business Interruption Loan, saying that, although it is a loan and not a grant like the self-employed scheme; it is still something being offered to help…
…if you’re renting
Thanks to a housing market that is increasingly inaccessible, the large majority of Millennial women are renters. The statistics show that 50% of Baby Boomers owned their own home by 30, this is now down to 30% of Millennials; who paid a staggering 60% of all rent last year in the UK. If that has thoroughly depressed you, please rejoice in this small bit of good news… The UK government has now made it illegal for private landlords to kick you out – good news for the aforementioned many of you who (thanks to cuts in wages or a sudden reliance on £94 a week) may no longer be able to pay the UK average of £183 rent a week alongside essentials like food and loo roll. Under new guidelines, however, rent is “still liable” despite the fact you cannot be kicked out. Confusing? Sure. The government’s official guideline is that they are working to extend “pre-action protocol agreement” which will “ help landlords and tenants to agree reasonable repayment plans where rent arrears may have arisen” as well as their bolstering of universal credit and housing allowance which, though small, will cover at least 30% of your rent. Mixed blessings here…
…if you own a home
If you are lucky enough to be among the 31% of millennials who own their own home, looks like a bit more luck is coming your way, as the government has announced that homeowners should be offered three-month payment ‘holidays’ if they are struggling to make their mortgage repayments as a result of the current pandemic. But this doesn’t mean you can simply cancel your direct debit, you need to agree this, in advance, with your mortgage lender. It’s a bit like asking for annual leave from your boss then..
…if you really need help
What this makes clear is that a lot of Millennial women will be left incredibly financially vulnerable by this crisis. That is why a lot of non-profit organisations have stepped in to help, like Gingerbread; which specialises in helping single parents and has come up with an information package and support fund to help at this time and The Young Women’s Trust which has, just this week, launched an emergency fund for the most affected.
“We are very worried that thousands of young women who were left behind before the crisis, have been left behind in the response to it,” says Sophie Walker, CEO of the Young Women’s Trust, “Young women are telling us they’re fearful about how they are going to pay their rent, electricity and gas and even feed their children over the coming weeks. We want to provide immediate relief to help these young women. The current climate is causing financial difficulties for many, but we know from the millions who have pledged to help the NHS and their communities during this crisis, that people stand ready to help others in their time of need. We urge them to stand with us as allies to young women who are economically vulnerable at this time.”