Women miss out on £599bn due to the gender investment gap

The UK gender investment gap stands at almost £600bn, with millions more male investors than female investors, and men holding far bigger investment portfolios and pensions.

This is the finding of a Boring Money study, which surveyed 6,000 UK adults. It estimates that men have £599bn more than women in stocks and shares Isas, investment accounts and private pensions. This is greater than the GDP of Switzerland.

The research also estimates that there are 6.4 million female investors compared to 9.7 million male investors.

Holly Mackay, chief executive of Boring Money, which provides tips to savers and investors, tells MoneyWeek: “The gender investment gap has stagnated and been stubbornly persistent for years now. Confidence is a key deterrent for women and with consumer and investor confidence at current lows, and the cost of living crisis biting, I suspect this gap will only get worse.”

Revelations of an investment gap follow new figures released last week about the gender pay gap. The gender pay gap rose to 8.3% in April – up from 7.7% a year earlier – according to the Office for National Statistics. The gap opens up over the age of 40: before then it’s 3.2%, after that it’s 10.9%.

In terms of the gender investment gap, this exists across all age groups: 28% of men aged between 18 and 35 invest compared to only 14% of women in the same age group, while 47% of men aged 65 and over invest, compared to 28% of women.

Female investors are more likely to be married, and slightly more likely to live in the south of England.

According to Boring Money, twice as many men hold a general investment account than women, and where women do have investments, the balance is well below that of their male counterparts. 

Pensions are also a key driver of the gender investment gap, with men having much more money saved for retirement in private pensions. The average private pension is worth £99,000 for women – £39,000 less than men’s pension pots, which average £138,000. 

Mackay called the gap “shocking”, and said it made her angry that the investment industry was not doing more to support women. “We know that women struggle with a hatred of jargon and lack of trust in financial institutions, but they are also dealing with big and often messy life challenges [such as motherhood, divorce and ageing parents], which are just not being recognised in the finance space. The industry is not tackling women’s ‘why’. It just rushes to focus on the ‘how’ and to churn out more content about complex financial products.”

Previous studies into how men and women save and invest have also revealed large gender gaps. Last year a report by the investment platform AJ Bell said women hold an average of £49,000 in savings and investments, less than half the average amount held by men of £114,000. Extrapolating this £65,000 difference across the UK population puts the gender investment gap at a staggering £1.65trn. This includes cash savings, unlike the Boring Money research.

The AJ Bell study also revealed that women save an average of £180 a month, significantly less than the £306 men tend to save.

Meanwhile, research by Legal & General earlier this year of 4.5 million defined contribution pension customers showed that, on average, women’s pensions are half the size of men’s (£12,000 versus £26,000).

In a bid to get more women interested in investing, Boring Money has launched a new service called Visible! Aimed at women in their 40s, 50s and early 60s, the online community brings together consumers, advisers and industry experts, with contributors including divorce barristers, female financial advisers and Mumsnet founder Justine Roberts.

Remember to get your tickets for the MoneyWeek Wealth Summit hosted by Merryn Somerset Webb, on 25 November 2022! – we’ve got some brilliant speakers lined up and, given everything that’s going on, we’ll have an awful lot to talk about.

Book your place now at moneyweekwealthsummit.co.uk