When discussing financial inequality, most of us are familiar with the concept of the gender pay gap. However, there’s a new issue on the horizon, one that’s quietly widening the disparity between men and women – the gender deposit gap. This gender disparity in first-time buyers highlights how women, despite already earning less, are also facing significant challenges when it comes to saving for major life investments – most notably, buying a home. Moneybox’s recent report on first-time buyers (FTBs) highlights the causes of the gender deposit gap and explores potential solutions to tackle this increasing issue.

What Is the Gender Deposit Gap?

The gender deposit gap refers to the difference in the amount of money men and women are able to save for a housing deposit. While many are aware of the gender pay gap – the long-standing discrepancy between male and female earnings – the gender deposit gap is a newer and less discussed issue. It’s an inequality that emerges as a direct consequence of women earning less over their lifetimes, and it has become a critical factor affecting their ability to step onto the property ladder.

This deposit gap is growing particularly wide among first-time buyers, where the cost of homes is rising faster than the ability to save for them. Given that the majority of women already earn less, they also struggle to accumulate the same deposit amounts as their male counterparts.

How the Gender Pay Gap Relates to the Gender Deposit Gap

At its core, the gender deposit gap is intrinsically tied to the gender pay gap. If women are earning less on average than men, it’s only logical that they have less disposable income to allocate toward savings, particularly for a substantial goal like a home deposit. The pay gap not only impacts women’s immediate financial situations but also leads to a compounding effect over time – limiting their ability to save for major life purchases.

Moneybox’s recent report conducted in-depth research on the challenges first-time buyers face, emphasising how women are disproportionately impacted by the housing market.

Millennial Women Face a £7.4K Deposit Savings Gap

One of the most shocking findings from the report is that millennial women face, on average, a £7.4K deposit savings gap compared to men. This is a significant disparity, especially when considering that saving for a deposit is one of the biggest hurdles on the path to homeownership. With the average deposit for a first home in the UK now sitting at approximately £60,000, this gap can delay women’s home-buying journeys by several years.

44% of Women Have Had to Cut Back on Saving for Their Deposit

The report also highlights that 44% of women have had to cut back on saving for their deposit, compared to 33% of men. This reflects the ongoing financial pressures women face, from earning less to having higher costs of living, often leading to a reduced ability to save.

30% of Women Have Delayed Having Children to Prioritise Buying a Home

For many women, buying a home has become such a daunting financial challenge that they are delaying major life events. 30% of women surveyed said they have delayed having children to focus on saving for a home, compared to 24% of men. This shows just how deeply the gender deposit gap affects long-term life planning, as women are forced to make hard choices about family and homeownership.

The Psychological Toll: 32% of Women Report Stress

The financial pressure of trying to save for a deposit also has significant mental health implications. According to the report, 32% of women said that the stress of home-buying had a negative impact on their mental health, compared to 18% of men. This stark contrast indicates that the financial inequality women experience directly contributes to a higher psychological burden.

How Gender Inequality Impacts Homeownership

Why Women Save Less for Deposits

There are several factors at play when it comes to explaining why women save less for deposits. These include:

• Lower Earnings: The gender pay gap means that women have less income to save for significant investments.
• Career Breaks: Many women take time off work to have children or care for relatives, which impacts their savings over time.
• Part-Time Work: A larger percentage of women work part-time than men, further reducing their capacity to save.

Cultural and Societal Expectations

There’s also a cultural aspect to this issue. Women are often still expected to take on caregiving roles, which limits their ability to work full-time or climb the corporate ladder, reducing their lifetime earnings and, by extension, their ability to save for a deposit.

How Single Women Are Especially Affected

As with the gender pay gap being worse for single women, single women also face even more challenges in the housing market. Without the benefit of a dual income, they must save the entire deposit on their own, while also dealing with higher living costs, such as rent, which can make saving for a deposit feel almost impossible.

READ MORE: Why the Gender Pay Gap is Worse for Single Women

Addressing the Gender Deposit Gap

So, what can be done to address this issue? According to the Moneybox report, first-time buyers, particularly women, are calling for several key changes:

What Women Want: Policy Solutions from the Recent Report

• Government Support: Many women want the government to provide more support in the form of grants or tax breaks for first-time buyers.
• Flexible Savings Schemes: A demand for more flexible savings schemes that cater to the unique challenges women face, such as savings accounts with lower minimum contributions.
• Affordable Housing: There is also a call for more affordable housing options in cities, where housing prices are skyrocketing.

How Employers and Governments Can Step In

Employers can play a crucial role in narrowing the gender deposit gap by addressing the pay gap within their organisations and offering financial wellness programs that help women save for major life milestones.

Governments can help by implementing policies that address the broader structural inequalities impacting women’s earning and saving potential.

Empowering Women Financially for the Future

Ultimately, closing the gender deposit gap requires both systemic change and personal financial empowerment. Women need better access to financial education, tools to help them save more effectively, and broader social changes to create a more level playing field.