Last month, a YouGov survey* asked thousands of people this very question: would they choose £50,000 upfront, or flip a coin for a 50/50 chance of winning £1m? The results shone a spotlight on just how risk averse UK investors are as a collective, and particularly how risk averse women are.
82% of female respondents choose the guaranteed cash, compared with 63% of men. But does this translate from the hypothetical into the real world? Are women less likely to invest, and if so, what is holding them back? George Square Financial Management shines a light on the investment gap below.
Latest statistics: Are women less likely to invest?
The short answer is yes. Research into the UK’s wealth continually shows that, on average, women face significant gaps in their savings, investments and pensions, which could negatively impact their financial future.
According to recent statistics shared by King’s College London, men in the UK have £567 billion more invested than women and are twice as likely to hold stocks and shares.
Only 26% of UK women invest, falling to 23% among those under 45, according to a study by consumer finance website Boring Money. In contrast, 41% of all men invest, staying broadly consistent at 40% among those under 45.
It’s important to note that women in the UK generally have less money to invest than men because the continuing gender pay gap means they earn less on average — the disparity between average wages for men and women is 12.8%, or £2,548 per year.
What does the current investment gap look like?
Fidelity’s latest research, published in May 2024, reinforces the scale of the investment gap. It shows that women are still less likely than men to hold savings, investments and pensions, and typically hold considerably less when they do.
The research found that while women are only slightly less likely than men to have savings (72% compared with 80%), women hold considerably less; the women surveyed had an average of £33,810 in savings compared with £50,500 for men.
As mentioned earlier, women are also far less likely than men to invest and hold less in their investments on average, at £54,040 compared with £72,170.
The pension gap is also significant. Although half (52%) of women in work hold employer pensions, this falls some way short of men (66%). Women are also less likely than men to hold personal pensions, and hold far less on average in their pension pot (£51,780 vs £82,760).
Why should women invest?
There seems to be a belief amongst women that investing is ‘not for me’, with only 27% agreeing that investing is for them, compared with 45% of men.
But, encouragingly, when women do invest in stocks and shares, Fidelity analysis found that, over three years, its female personal investing customers recorded cumulative returns of 50%, compared with 47% for men. With data showing that women trade around half as frequently as men, who are more likely to chase higher returns, it appears the restraint that may keep women out of the market in the first place can also reward them once they are in it.
Seeking professional advice
So, returning to the YouGov question: would you choose the guaranteed £50,000, or take the chance of £1m? For many women, the answer may reflect more than attitude to risk. It may also reflect confidence, access to advice, and the wider financial gap that continues to shape long-term outcomes.
Whatever your circumstances or situation, it’s always a good idea to seek professional, independent financial advice to make informed decisions about building and protecting your assets, making the most of your investments and securing the long-term future of you and your family.
At George Square Financial Management, our experienced advisers work with a diverse range of clients; this includes a growing number of female clients and multiple generations within the same family. We invest our time in getting to know you, listening, and learning until we fully understand your priorities and aspirations in both the short and long-term.
If you feel that you or a member of your family could benefit from financial planning advice, please call us on call us on 0115 947 5545 or send us a message here.