Breaking down barriers to the gender investment gap

As part of Aviva’s commitment to promoting financial inclusion its most recent research sheds light on women and investing and aims to provide valuable insights to empower women to take control of their financial journeys and plan for a better future. 

More than two thirds of women (68%) invest money at least once a month and more than 2 in 5 (42%) check their savings and investments online, or via an app, at least once a week. This leads to almost one in five (19%) knowing exactly how much their investments are worth at any given time.

Of the women who do invest, the largest proportion save into a regular savings account (61%) and one in three (35%) invest into Cash ISAs, but just over one in six (17%) hold a stocks and shares ISA, compared with 30% of men.  

Equal numbers (37%) cited ‘easy access to funds’ and ‘being protected by the Financial Services Compensation Scheme (FSCS)’ as the most important aspects of choosing a savings or investment product. ‘Low or reasonable fees and charges’ was most important to almost one in four (23%), and almost one in five (19%) stated that ‘access to a digital app’ was essential.

Almost two in five (37%) of women surveyed say they do not invest at all, compared with almost a quarter of men (24%). The reasons given were varied. Predictably in the current environment, ‘not having any surplus money’ to invest (45%) was top of the list for most women. Almost one in five (18%) think the risk is too high, 10% say they find investing too complicated and 9% worry that they won't be able to withdraw money if they need it urgently. Some (6%) say they don’t know where to start.  These factors all highlight the need for targeted financial education and further empowerment for women.

Aviva’s research also shows that women have a balanced approach to risk. When asked to describe their investment risk tolerance the majority (85%) said their investment strategy was either medium (35%) or low (50%) risk. This approach is to be commended as studies¹ suggest that female investors regularly outperform their male counterparts over the longer term, which is attributed to a patient and more disciplined investment style. 

Joanne Philips, Managing Director of Direct Wealth at Aviva says, “In an era where financial independence is a key aspiration for many, there is a need to address some of the unique challenges that many women may face when it comes to investing. 

“Whether they are just starting out, or looking to enhance their investment strategy, it’s important to consider and take practical steps to help navigate the often daunting world of investing. By providing tailored guidance for women, we hope to inspire confidence and enable them to achieve their financial goals.

“Aviva’s Wealth app is now available to download, and is designed to provide helpful information for investors and provide a holistic view of all their Aviva investments in one place. We know that a digital experience is important to consumers, so we hope by simplifying the investment journey we can help them to expand their wealth in an intuitive way.”

Key investment tips:

1.  Education: Start by building a solid foundation in financial literacy to develop knowledge about different investment concepts, terminology, and strategies to make informed decisions. There are plenty of online courses, tools and calculators available.

2. Set and prioritise financial goals: Clearly define short and long-term financial goals. Having clear goals will guide the investment strategy and help stay focused on what matters most. Decide whether saving or investing is best for you. Cash guarantees you safety but may get eroded by inflation. Investing will make your money work harder, but you could get back less than you put in.

3. Emergency fund: Before diving into investments, establish an emergency fund to cover unforeseen expenses. This provides a financial safety net and prevents the need to cash in investments in an emergency.

4. Don’t put all your eggs in one basket: Consider spreading your savings and investments across a variety of different funds, assets, and tax efficient wrappers to reduce your risk and optimise long-term returns. Diversification can provide a more balanced approach to long-term wealth creation. Only 7% of women say they are investing in a diversified portfolio vs 18% of men.

 5. Support networks: Connect with other investors - building a strong network can provide valuable insights and encouragement throughout the investment journey. Learn from the experiences of others.

6. Stay informed: Keep abreast of market trends and emerging opportunities. Stay updated on what’s happening in the domestic economy or global events that may impact your investments. And regularly review your investment portfolio to ensure it still aligns with your goals and risk tolerance. You may need to make changes based on your financial situation or market conditions. 

7. Understand your risk tolerance: Assess your risk tolerance and invest accordingly. Tailor your portfolio to align with your comfort level, ensuring a balanced approach to risk and return.

Investments can go down as well as up. These guidelines are designed to break down barriers and equip women with the knowledge and confidence they might need to navigate the world of finance successfully. However, individual circumstances will vary. It is always advisable to consult a financial adviser who can provide personalised advice based on specific goals and financial situations.

Aviva is a proud member of The Investing and Savings Alliance (TISA) and has joined forces with them to help make investing accessible to all. Its “Inclusive Investing” initiative was  launched amplified at its Inclusive Investing Conference in London at the beginning of March 2024. 

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Sources:

^{1. Warwick Business School}

Methodology:

The research was conducted by Censuswide between 10^th – 12^th  January 2024 of 2003 general consumers, aged 16+, national representative sample. Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.

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