A report from Hargreaves Lansdown has shown the barriers women face when it comes to investing, causing them to lag their male counterparts when saving for their future.
The Hargreaves Lansdown Why Women Invest report showed that the majority of Hargreaves Lansdown stocks and shares ISA clients are men (62%).
In contrast, many women struggle with investing, with Hargreaves Lansdown’s head of personal finance Sarah Coles noting that women earn less than men and most weren’t taught about investment, either at home or at school, creating “a risk many women just don’t feel part of the investment world.”
Nearly two thirds (65%) of women say they are not prepared to take a risk with investment, rising to 79% among the over-55s and 42% of women don’t want to lose money.
According to the findings, a quarter (26%) of women say they simply don’t earn enough to invest and 38% say they don’t have enough spare money.
However, Hargreaves Lansdown said their research also showed that one in three women have at least £20,000 put away, suggesting that a lack of knowledge and confidence around investing also has a key role to play in women’s reluctance to invest.
Only around a third (36%) of women said their family educated them about investments and fewer than a fifth (19%) said their school helped, leading 63% of women to admit they don’t know much about investing.
Hargreaves Lansdown said women face cultural barriers too, with investing often presented as something for men. And while there is a generational shift afoot, with 87% of women agreeing they feel more empowered to make decisions about finances and investments than previous generations, there is still a way to go.
Two thirds of women admit financial jargon makes things harder, while others find it too dry, and many are put off by risk warnings. Difficulty in getting to grips with information about investments means 22% of women say they don’t know anything about investing and 21% don’t understand investments or think it seems too complicated.
Among those women who do invest, a common theme that emerged was working with someone else. A quarter (25%) started investing after getting advice and 22% invested after being encouraged by family or friends. A fifth (18%) of female investors said finding out more information persuaded them to start investing.
Hargreaves Lansdown said it can also help to focus on the reason for investing, with many women recognising that longer life expectancy will require them to have more income in retirement. Of the women who do invest, nearly half (49%) are doing so for retirement and 35% do so for income.
A desire to help family was also a driving reason, with 45% of women agreeing that females save and invest with their family in mind. A quarter want to provide an inheritance and 12% want the money for something specific to help their children or grandchildren in life. For others, a major life event like bereavement or divorce can trigger a desire to invest.
Main image: dane-deaner-iJ1lw8iNIy8-unsplash
