The data is clear – women are better investors than men. According to a 2018 study from Warwick Business School, women tend to make fewer changes to their portfolios, are less reactive to market panic, and take a long-term, rational, and evidence-based approach to investing. However, women are simply not encouraged to invest in the same way that men are. Most women, including myself, recognise that traditional retail investment marketing and ads are not aimed at us, and worse, they tend to stereotype our financial needs.
This is a serious problem, both for the financial well-being of women and the UK economy. Scottish Widows’ Women & Retirement report found that only 34% of women aged between 18-24 say they invest outside of pensions (which often requires minimal effort thanks to auto-enrolment), compared to 64% of men of the same age. This is of particular concern given the value that saving early and compound interest can bring.
Additionally, if women invested at the same rate as men, this could potentially unlock billions more pounds for the UK economy. It’s time investment providers prioritise attracting and fostering greater participation from women in investing.
Accessible financial education and advice
Financial literacy is a key factor in addressing the gender investment gap. Many women lack the confidence or knowledge to invest effectively, often due to a lack of education in personal finance or prejudice about investing. Women also tend to be more risk-averse than men, which can lead them to hold on to cash or low-yield savings accounts like Cash ISAs instead of taking advantage of higher-return investments. Data from Wealthify, which surveyed 2,000 Brits who had at least £5,000 in savings but had never invested before, found that 74% of British women were nervous about investing compared to just 58% of men – despite women being more likely to have financial goals. This reflects my own experience of investing. Despite having a financial background and clear financial goals, I was very nervous about putting my hard-earned cash into what I perceived as risky assets. Instead, my savings sat for years in an Easy-Access ISA, barely earning 1% a year; that is until a Moneybox ad on the London Underground piqued my interest, encouraging me to open a Stock & Shares ISA.
Educating women, via easy-to-understand communications, on the basics of investing, risk management, and the importance of long-term financial planning will empower us to make informed decisions about our money. Financial literacy programs, particularly those aimed at younger women or those with limited access to financial education, are crucial in helping women navigate the complexities of investing and achieve those important financial goals.
It’s time investment providers prioritise attracting and fostering greater participation from women in investing.
From a communications standpoint, the finance industry needs to be more inclusive in how it engages women investors. Traditional marketing for investing often targets men, using language and imagery that may alienate women. A more effective approach would involve addressing
women’s specific investment concerns, such as sustainability – a recent UBS study3 found that women tend to make investing decisions with more sustainability considerations in mind compared to men. It’s also important to showcase diverse female role models in finance and investment to break down stereotypes and provide relatable examples. For instance, not all women are or want to become mothers, but advertising and marketing material overwhelmingly positions women’s financial needs in relation to their families, rather than their financial goals as individuals. Since 2018, Starling Bank’s Make Money Equal campaign has highlighted how women and men were spoken to differently about money and how women were portrayed in the media when it came to money. Women were perceived as clueless or extravagant with their spending and told to stop splurging on shoes, while men were shown in control of financial decisions and advised on how to grow their investments. The campaign offered alternative ways that women interacting with money could be represented and spoken about by the media and advertisers.
Womanhood is not a monolith – women’s financial needs are diverse and complex. However, we all want to be given the same opportunities as men to achieve our financial goals. By addressing financial education gaps and tackling communication biases, the finance industry can empower women to take control of their financial future.
Sources quoted:
1 “Are women better investors than men?”, Warwick Business School, 28 June 2018
2 Scottish Widows Women & Retirement Report 2024, based on a YouGov survey of 3,650 women between 23rd August and 6th September 2024.
3 “Women want to do good with ESG investments”, UBS, 2 December 2022
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