6 reasons why women should invest

Posted on: 4th March 2022 in Finance

There are many reasons for women to invest their hard-earned money but stats are sometimes conflicting. Despite efforts from institutions and women’s associations, the gender pay gap still exists, especially in the financial services industry. Financial equality is still just a figure of speech in many countries.

Many women start their professional life with a disadvantage in regards to salaries. To make things worse, research shows that women don’t seem to invest as much as men, with the percentage of women investors being much lower.

Stats about women investing

According to a survey published by Kantar, 10% of women in the UK have a stocks and shares ISA, compared to 17% of men. The ratio of male to female customers among the top 10 DIY investment platforms is reported to be 68 to 32.

Another survey published on behalf of Fidelity Investments at the end of 2021 was more optimistic. According to it, “on average, women investors achieve positive returns and surpass men by 40 basis points, or 0.4%. The figure is based on an analysis of annual performance across 5.2 million accounts from January 2011 to December 2020.”

What could lead women to invest?

As noted earlier, women have tons of reasons to review their approach to money management and especially investing. A balanced portfolio can become their safeguard against adverse conditions. Below you can read why women should build an investment plan. 

Income gap 

The income gap between men and women exists and it is likely to continue to exist in the next few years. Women get paid less than their male colleagues in the same job positions. This is substantiated by surveys conducted in many countries. 

Having a lower income means that women are not able to achieve their financial goals. That’s why women should be taking advantage of investment opportunities and set long-term goals to compensate for their reduced income.

Unpaid labour

One more reason for a woman to seek financial advice and engage in an investment process is unpaid labour. Around the world, women spend two to ten times more time on unpaid care work than men, as a report published by the Organisation for Economic Co-operation and Development (OECD) suggests. Analysts at the OECD note that “gender inequality in unpaid care work is the missing link in the analysis of gender gaps in labour outcomes, such as labour force participation, wages and job quality.”

Pregnancy and childbirth may require women to take unpaid leave, depending on the country they live in and national legislation. Motherhood should not limit opportunities for women to invest and achieve financial security.

Career gaps

After a career break, nearly 1 out of 2 women face unequal pay, followed by a lack of career advancement possibilities and professional development opportunities. Creating a family is usually one of the main reasons for a career gap in a woman’s CV.

Working with a financial planner who could suggest the right investment strategies allows women to make the life choices they really want without stress and uncertainty. The lack of funds affects our daily lives, so a comprehensive investment approach is needed to achieve economic growth.

Savings only?

A report by the ONS showed that 26% of people living in the UK have less than £1,000 in savings. If the question is: “do men or women save more money?”, then the answer is quite disappointing for the female gender. Researchers at Raisin UK noted that men in the UK do save more, adding that “men have almost double (£13,140.61) the average savings of women (£6,869.84).”

Having a savings account is the first step towards achieving our savings goals. However, central banks have reduced interest rates to all-time lows. This means that low rates combined with high inflation hurt your savings. There are many investment products to match your financial plans. All you need is a financial advisor who would suggest the right ways to build your financial wealth.

Divorce or death of a spouse

Your marriage will end one day. It might sound gloomy but that is the reality and you should be prepared for it. In many cases, couples have a common financial plan that includes having joint bank accounts. This choice simplifies things when you are in a good relationship with your spouse or when your spouse is still alive.

But what happens when things don’t go according to plan? When your relationship is close to its end or when an unexpected event takes your spouse out of your life? Financial advisers suggest that a thorough financial plan should include an emergency fund for such situations. There are many financial products that could give you the investment returns you seek. Advisers urge women not to neglect to safeguard their future and take advantage of the presented investment opportunities. You may also want to look into a life insurance policy that pays out when either husband or wife passes away, meaning you don’t struggle with any financial hardship.

Worry-free living

Stress, uncertainty and anxiety dominate our lives. Worrying if you have enough money or if you’ll be financially ready for retirement puts a strain on your way of thinking, dreams and financial freedom. 

Having a comprehensive investment plan in place could help you grow your wealth and relieve yourself and your loved ones from the stress. You’re well on your way to constructing a well-balanced portfolio once you’ve identified your current and long-term objectives. With a financial adviser’s help, you can succeed in enjoying the lifestyle you always wanted.

Investing with Holborn Assets

With the gender pay gap still growing, financial experts note that financial planning is vital for women. It becomes essential if you and your partner have children or if you have to cover your family’s needs as a single mum.

With regards to investments and savings, there is no “one size fits all” approach. If you’d like, you can allocate a portion of your budget to various investment products. The most important thing is to choose the right products for your needs and objectives.

If you’re ready to start investing, Holborn Assets has the experience and expertise to assist you in determining which types of investments are right for you. Please contact our independent financial advisers today.