Women may take the lead on household spending and budgeting but they lag their male counterparts when it comes to investing and retirement planning, new research has shown.
According to St. James’s Place Women and Wealth report, which surveyed 6,000 individuals across the UK, women are far less likely than men to lead on decisions that shape long-term wealth, including investment (34% of women versus 53% of men) and retirement planning (32% versus 48%).
Women were also less likely to lead when it comes to wills and estate planning.
In contrast, more than four fifths (84%) of women are actively involved in managing daily finances and are more likely than men to say they lead on day-to-day spending decisions (45% of women versus 33% of men) and household budgeting (46% versus 39%).
Despite women building more wealth through careers, entrepreneurship and inherited wealth, SJP said the findings show they continue to lack confidence or engagement with longer-term financial decisions.
Just over half (54%) of women say they would feel confident managing a significant inheritance or financial windfall alone, compared with 66% of men. Confidence drops even further when it comes to investing a windfall, with 44% of women saying they would feel confident doing so, compared with 60% of men.
More broadly, only a quarter (27%) of women currently invest, compared with more than two fifths of men (43%).
However, women receiving advice were found to be significantly more likely to say they feel confident managing a substantial inheritance or financial windfall and investing it than women who do not receive advice. They are also significantly more confident making changes to investments (74% versus 41%), adjusting pension contributions (68% versus 43%) and making changes to a will (84% versus 55%).
The research also shows that women who currently receive ongoing financial advice are almost four times as likely to invest than those who do not receive advice and more than twice as likely to have a financial plan in place.
SJP said this is associated with better financial outcomes, with women who invest more than twice as likely to describe themselves as financially comfortable than women who do not invest.
Claire Trott, head of advice at St. James’s Place, said: “The gaps we can see aren’t driven by women lacking interest in money. 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.”
Trott said 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,” she added.
Main image: adam-winger-Xt4g9VbMljE-unsplash
