How financial advice could encourage more women to bridge the investment gap

Category: News

This year, International Women’s Day takes place on 8 March. Organisers are asking us all to imagine a gender-equal world, free of bias, stereotypes, and discrimination.

Gender gaps still exist in UK finance, from rates of pay to the numbers willing, or confident in their ability, to invest successfully.

Bloomberg reports that men working in finance and insurance made 25% more than women in 2020. A YouGov poll back in 2018, meanwhile, confirmed that 52% of women have never held an investment product. For men, that figure was just 37%.

A recent survey from the Royal Mint confirms that an investment disparity still exists and that a knowledge gap might be behind women’s reluctance to take the plunge. At Lloyd O’Sullivan, we have the expertise to help you make sense of your investment choices.

Here’s how bridging the gap and starting to invest could benefit you. 

Reports confirm a gender investment gap

The recent Royal Mint survey reports that 51% of UK adults who don’t currently invest would like to in the future. The majority (76%), however, believe that a lack of knowledge is preventing them.

While 37% of women said they understood the basics of investing, for men, the figure was 56%. This disparity partly explains the gender gap in investment, with just over a quarter of females investing regularly, compared to more than half of men. 41% of women rarely invest, compared to only 14% of men.

In the current low interest rate, high inflation climate, cash holdings are in danger of losing value in real terms. The potential for inflation-beating returns on investment (albeit with the added risk that your invested amount could drop as well as rise) shouldn’t be confined to one sex and therefore education is key.

Making investment decisions caused 54% of women to feel overwhelmed, according to the Royal Mint, with respondents suggesting that they “didn’t know where to start”. This figure compares to just 39% of men.

The discrepancy exists in pension investment too

The FCA’s Financial Lives survey in 2020 found a gender gap in pension engagement levels, with 64% of men aware of how much they pay into their pensions, compared with only 51% of women. Of those who don’t know their contribution levels, 41% don’t know where to find that information.

Meanwhile, a Scottish Widows Women and Retirement report (also from 2020), found that:

  • Women in full-time work received an average of £6,100 a year less as a median wage than men in full-time work.
  • Between men and women in all jobs, the average annual difference in median wage was £10,800 in favour of male workers.
  • A woman with average savings rates on the median wage over a 44-year career would retire with £100,000 less in her pension pot than a man in the same position.

Why invest?

As we have seen, with bank savings rates low and inflation high, the money you hold in cash is effectively losing value in real terms.

While we would always recommend you hold some money in an easy access cash account for emergencies, be sure you’re not holding too much.

We would generally recommend that you save three to six months’ worth of expenses as a rainy day fund. Once you reach this amount, consider investing the rest.

You’ll need to remember some investment basics:

  • Investing is a long-term proposition so be sure you have a goal in mind that is at least 5 to 10 years away.
  • Your invested fund value can rise as well as fall so think carefully about your attitude to risk and your capacity for loss. We can help you consider these.
  • The stock market rises and falls daily and sometimes global events lead to short-term volatility. Staying patient and staying invested is usually the best way to reach your long-term goals.

Lloyd O’Sullivan can unlock the benefits of investing

At Lloyd O’Sullivan, we have decades of combined experience and always work with our client’s best interests in mind. We aim to provide the same service we would want our family and friends to receive and will do the right thing by you, not us.

We’re independent too, which means that we can find the right option for you from across the whole market and aren’t tied to specific products. We’ll explore the available strategies that best align with your goals and help you to manage risk too.

Attaining your goals means protecting yourself and your family from potential financial shocks and we can offer you expert advice and support on your journey.

Get in touch

If you’d like help deciding whether now is the right time to take the plunge into investing – if you’d like help managing a current investment – please get in touch. Email or call 020 8941 9779.

Please note:

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.