Yahoo Finance Who is the breadwinner in your family and does it matter for your finances?
Breadwinners seem like an old-fashioned concept, but they’re quietly thriving in homes around the country. On average in a couple, one of you will earn around three quarters of the income, and in three quarters of relationships, this person is a man.
Women earn as much as, or more than, their partner in one in four households, and while this is up from one in five 20 years ago, it demonstrates how slowly society is changing, and how common it still is to have a main breadwinner.
We know from gender pay gap data that women and men earn very similarly while they’re starting out. However, over time this gradually shifts, and at the age of 40 – when often there’s one child or more on the scene, or one parent has spent years juggling work and care – a gap opens up between men’s earnings and women’s. This is often when the man becomes the main breadwinner, and the older a couple are, the more likely the man is to carry most of the earning responsibility.
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And it is a responsibility. Studies have shown that being a breadwinner comes with emotional baggage for men. One US study showed that over a 15-year period, men’s health and happiness fell when they became the breadwinner.
Things were slightly different for women, possibly because there was less societal expectation, or possibly because those women who are breadwinners have actively chosen to be. For these women, the societal expectation comes at home, and 45% of female breadwinners still do the majority of the household tasks – compared to just 13% of male breadwinners.
Regardless of who is the breadwinner, there’s a financial cost too. The HL Savings & Resilience Barometer measures the balance of income between couples, because fundamentally having two people making roughly the same amount of money means you’re more resilient if one of you falls ill or loses their job.
The barometer also looks at every aspect of their finances. It shows that households with a significant main breadwinner tend to earn much less overall. They’re less likely to have enough emergency savings, they have less money left at the end of the month, they have more problematic debts, and are less likely to be on track with their pension savings.
The more uneven the income, the less likely couples are to say they plan their finances together. The data consistently shows that those who plan together are far better off than those who go it alone. It means that couples with a single breadwinner can improve their financial position without having to significantly change their earning patterns, just by talking to one another.
When both of you are engaged in your finances, there’s also the chance to consider everyone’s perspectives, so you don’t end up with the retirement that the breadwinner dreamed of, which is simply tolerated by the second earner. It also raises questions like whether a higher earner should consider paying into the pension of a non-earner, so you both have money of your own at retirement
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Couples with a significant breadwinner are also far more vulnerable if something goes wrong, which is why it’s essential to consider life insurance and income protection for the highest earner. Critical illness cover can also be valuable, covering their costs if they suffer an illness or injury that keeps them out of work for a period. You also need emergency savings to fall back on if the higher earner loses their job.
As a rough rule of thumb, you should have cash to cover at least 3-6 months’ worth of essential expenses in an easy access account or cash ISA, just in case. Don’t just focus on the higher earner though. You also need to consider cover for the lower earner, or any non-earner with caring responsibilities. If they can’t care for children or elderly parents, the breadwinner may need to step in or pay for care.
Over time, we can expect the balance of earnings in families to gradually shift, but the data clearly shows us that in this area, change is incredibly slow. It means that while we can personally work to ensure our family has a balance of earnings that works for us, we also need to plan for the fact that this may not be entirely even.
Watch: How to save money on a low income
