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Recent data indicates that women who invest their money tend to achieve marginally better long-term returns than men. Despite this, only around 26% of women in the UK have investments, a figure that drops to 23% for those under the age of 45. In comparison, approximately 41% of men invest, with around 40% of men under 45 involved in investing as well. This disparity raises questions about why fewer women choose to invest their money compared to men.
One contributing factor is cultural. Gillian Fleming, co-founder and managing director of Mint Ventures, explains that historically men have been the primary decision-makers in family investments and have owned more wealth, but this is gradually changing. Fleming also points out that discussions about money and wealth creation are less common among women, a trend the industry hopes to reverse. Supporting this viewpoint, Teleri Evans, a civil servant from Cardiff, shared her experience of aggressively saving and investing through Help To Buy ISA and Lifetime ISA accounts, which helped her accumulate £40,000 by age 33, including £8,000 in returns. She has observed that conversation about investing is increasing among women, especially within her social circle.
When women do participate in the stock market, their investment behavior may partly explain their slightly higher returns. An analysis conducted by Fidelity International revealed that female personal investors saw cumulative returns of 50% over three years, compared to 47% for men. This difference may be linked to trading frequency, as Barclays data shows women trade about half as often as men. Joanna Floyd, a business psychologist, suggests that women tend to be more patient and risk-averse, which ironically leads to better returns despite their more cautious entry into the market. This humble approach to risk-taking extends beyond investing and influences financial decision-making more broadly.
Regarding investment choices, Fleming suggests that women are generally more risk-aware than risk-averse, focusing less solely on potential high returns and more on diversification across various industries such as retail, health, and creative sectors. Anna Macdonald of Hargreaves Lansdown agrees that women are more deliberate about where their money goes, often considering the social impact and alignment with their values. Similarly, Jemma Slingo from Fidelity International notes that women are more likely to connect investing with tangible life goals, like building savings or supporting their families. The gender pay gap means women typically have less capital to invest than men, highlighting the importance of making investing accessible and relevant to encourage greater female participation
Read the full article from The BBC here: Read More
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