Gender investment gap 'remains wide' despite rising wealth amongst women

The gender investment gap remains wide, St. James’s Place (SJP) has warned, with women “far less likely” to lead on decisions that shape long-term wealth than men, despite growing influence.

SJP’s Women and Wealth report showed that 34 per cent of women led on investment decisions, compared to 54 per cent of men, and were also less likely to lead on retirement planning (32 per cent vs 48 per cent) or estate planning (28 per cent vs 36 per cent).

This is despite the fact that an estimated 56 per cent of transferred wealth globally by 2048 will be inherited by women, according to Capgemini’s World Wealth Report, while more women are also building wealth through careers and entrepreneurship.

SJP said its research suggested this growing influence was not being matched by confidence or engagement with longer-term financial decisions.

Just over half (54 per cent) of women said they would feel confident managing a significant inheritance or financial windfall alone, compared to 66 per cent of men.

Furthermore, the gender investment gap continued to be evident, with just 27 per cent of women currently investing versus 43 per cent of men.

Women were also less likely to have a plan in place to manage their money, at 33 per cent compared to 42 per cent of men.

Fewer than half (44 per cent) of female respondents felt confident making changes to investments on their own versus 63 per cent of men.

SJP’s findings suggested that advice has an important role to play in improving investment confidence among women, with 82 per cent of those receiving ongoing advice reporting confidence about managing inheritance or windfall compared to 52 per cent not taking advice.

More than three quarters (76 per cent) of advised women were confident about investing a significant inheritance or windfall, versus 41 per cent of non-advised women.

Advised women are also more confident about making changes to investments (74 per cent vs 41 per cent), adjusting pension contributions (68 per cent vs 43 per cent), and making changes to a will (84 per cent vs 55 per cent).

More broadly, women who were receiving advice were four times as likely to invest (77 per cent) than those who did not receive advice (22 per cent).

“The gaps we can see aren’t driven by women lacking interest in money,” commented SJP head of advice, Claire Trott.

“In fact, women are highly involved in managing all aspects of daily finances. The challenge is that too few are managing longer-term financial decisions that shape their future wealth, from investing to estate planning to pension decisions.

“This is where financial advice can make a real difference. As highlighted by our research, advice can help women build confidence, understand their options and take practical steps towards their long-term goals, whether that is investing, planning for retirement, managing an inheritance or passing wealth on.

“As women’s influence over wealth continues to grow, advice needs to reflect the realities that shape their financial lives, from career breaks and caring responsibilities to changing family circumstances.

“Helping women connect financial planning and investing to the life they want to build will be key to increasing long-term engagement and improving financial outcomes over time.”

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