Why are women afraid of investing?

Women are less likely to invest than men, with only two in 10 (21 per cent) aged 40 to 55 holding money in the stock market compared to over a third (34 per cent) of men in the same age bracket.

According to research by consumer website Boring Money, the three major barriers to investing are confidence, willingness to engage, and time.

Its survey of over 6,000 people also found that men are twice (30 per cent) as happy as women (17 per cent) to pick their own investments, while women are far more likely to use a financial adviser – with 25 per cent of women saying they use or would use an IFA to help them choose what to invest in compared to 19 per cent of men.

Women are also more likely than men to seek investment recommendations from friends and family.

Boring Money chief executive, Holly Mackay, says: ‘Our failure to engage women as long-term investors simply exacerbates a key problem we face – women are typically paid less, earn less and are also less likely to engage with the investment products which could deliver better returns for long-term savings.

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'We need to tell people that investing can be for them, regardless of their gender, age or net monthly wage, or attempts to deliver equality in later life will fall short. This is a bigger issue than simply looking at the pay gap.’

Similar research conducted by Alliance Trust Savings also found that women have less confidence in investing, with less than half (44 per cent) seeing it as a calculated risk to grow their money, compared to two thirds (66 per cent) of men. Women are also far more likely to be put off by investment risk warnings, self-identifying an average level of concern of 6.9 on a scale of 0-10 when warned they may get back less than they put in, compared to 5.7 for men.

Sara Wilson, head of platform proposition at Alliance Trust Savings, comments: ‘Unknowingly, women could be putting their financial futures at risk through fear of investing and not prioritising their long-term finances. With interest rates currently so low, inflation is eroding the value of cash savings in real terms. The gender pay gap is still very real and changes to the state pension age mean women’s pre-retirement incomes are now falling.’

She adds: ‘The financial services industry needs to tackle this issue head on to give women much needed financial confidence now.’

That said, Boring Money found similar numbers of men and women want investing to be simple – 14 per cent of men and 14 per cent of women want a simple ready-made option from the organisation they’re using to help them invest, while 12 per cent of men and 13 per cent of women want a shortlist of investments to choose from.The investment gap between men and women also narrows when it comes to the younger generation, with 45 per cent of women under 25 having no savings or investments and 40 per cent of men in this age group saying the same. 

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