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The Investment Gender Gap

The investment gender gap image

Over the course of a working lifetime, women are financially short-changed in a host of different ways. What this adds up to is a wealth gap that could see them thousands of pounds worse off than their male counterparts by the time they retire.

The disparity in the state pension alone, which currently pays men on average £153.86 a week and women £125.98 could see women at least £29,000 worse off over the course of a typical 20-year retirement.

52% of Women Have Never Owned Any Investment Product

More than half of women have never owned any investment product. When compared to 37% of men, this shows a startling gap between the genders.

Women Are Expected To Control 60% Of The UK’s Wealth By 2025

With women having so much more wealth at their fingertips, increasing year on year, it’s essential that they know how to make this money work for them.

Here’s why women should be investing.

1.Women Need A Bigger Pension

Everywhere in the world, women tend to live longer than men. In the UK, it’s on average by 4 years. So if you’re living longer, you’re going to need the funds to do so.

2. Women Need To Compensate For All The Unpaid Work They Do

Women are more likely to take career breaks to either have children, care for children or care for others in the family, such as elderly relatives. In fact, over the 18-month period from April 2017 to November 2018, 34% of women were economically inactive due to providing care for the family/home, compared to just 6.9% of men. This means that women have gaps in their earning life where they are not making any or making small pension contributions.

3. More Women Work Part Time Than Men

42% of women in employment work part-time compared to just 13% of men. This often enables them to work around other responsibilities, but means they have less pension contributions.

4. The Gender Pay Gap

The gender pay gap means that women earn less over a lifetime than men. The gap is currently at 8.6% among full-time employees. This means, again, that women are going to be making lower pension contributions and likely have less to save or invest.

5. Women Are More Successful At Investing Than Men

Research shows that women assume less risk and have a higher success rate than men. They not only save 0.4% more than men, but their investments earn 0.4% more annually too.

6. Women Are Already Making Most Of The Financial Decisions

When it comes to making financial decisions within a household, women are taking an increasing role. They’re more likely to think about day to day priorities and be responsible for things like food shopping and household items.

Only 28% of women feel comfortable investing according to a YouGov poll, but 64% understand that investing is important. So what stops them?

Investing Is Not Just For ‘Older, Wealthier Men’

Women tend to see investing as “not for them”. Instead, it is thought to be something for “older, wealthier men”, with words like “untrustworthy, masculine, unwelcoming and vague” being cited by an investigation from Britainthinks.

Instead, women favour cash ISAs and savings, but without investing, they risk their financial future and the freedom that it brings.

Next Steps For Investing

As we now know, some of the biggest barriers to women investing are a lack of confidence and lack trust in financial institutions.

Here are some simple ways to make yourself feel more at ease before deciding whether to invest.

  • Arrange a meeting with a financial advisor - if you would feel more comfortable talking to a woman you can look for a female advisor.
  • Do a little light reading on the stock market to understand the very basics of how it works.
  • Ask around - you may have friends or family who have invested and they might be able to offer you some advice.
  • Check out the Financial Conduct Authorities website for a list of companies to be aware of.

If you’re worried about being scammed, read more on how to protect yourself against fraud.

Robert Bester

Updated on 5th July 2019