Why has the gender investment gap grown?

In our Online Investing Report 2022, we revealed that only 40% of investors are women, a slight decline on last year, when 41% were women. Other metrics are moving in the right direction, however. The cost of investing has fallen, engagement with investment products has improved, investors are getting younger, average balances are falling and yet we are going backwards when it comes to making investing more appealing to women.

So why does the gender investment gap still persist in 2022? And why has it grown slightly?

There are many factors to consider here, but our research has indicated that women are:

• Less likely to invest than men in the first place.

• More likely to say that they are less confident investors.

• More likely to sit on the investment side-lines.

Why are women more likely to sit on the investment side-lines?

Traditionally, the investment and advice sectors have been male-dominated, and recent research by Quilter indicates that this has led to a bias towards male consumer needs. Of investors and savers who receive advice, only about 40 percent are female.

But did you know that savers who would consider investing are most likely to be women between the age of 35 and 44? This is an open door to push on. And women are more likely to say that sustainable investment options are important when considering a new investment product.

Our research has also shown that

• 30% of women said it was important to have the option to invest sustainably and back socially responsible firms, compared to just 24% of men.

• 29% of women who save but don't invest said the option to invest sustainably and back socially responsible firms was important to them, compared to 26% of men.

• Women are almost twice as likely to say that it's important to have someone on the phone to talk them through a new investment product.

• However, women are less likely to want the ability to manage their investments via a mobile app or to have a wide choice of investments from multiple investment managers.

So what can be done to help tackle the gender investment gap?

It’s a bit two-dimensional to say that fewer women invest because they are more 'risk-averse'. The reality is far more nuanced, and the industry has plenty more work to do to try and close the gender investment gap.

Our Boring Money CEO and Founder, Holly Mackay, says investment providers need to get better at:

• Helping women understand the impact of their investments

"Naturally, women want to see returns on their investments, but they also want to see the impact of their money. Investing for the future—whether it is their own financial security or for the future of the planet—goes hand in hand with female empowerment."

• Understanding what demotivates women from investing

"To solve this crisis, we need to take the conversations to women and not just expect them to come to us. We need to talk, we need to engage, we need to be relevant and we need to be accessible. We won’t solve this by doing what we’ve always done, and just buying a bigger megaphone.”

• Distinguishing 'risk' from 'uncertainty'

"The language is quite technical and 'jargony'—it’s that two-dimensional risk concept—the very word ‘risk’ is wrong—it isn’t risk, it’s ‘uncertainty.’ Risk is doing something silly. That will put women off whatever age they are."

Are women better at investing than men?

A few years ago, Hargreaves Lansdown revealed that, over a three-year period, their female clients saw the value of their investments grow 0.81% more, on average, than their male clients. Over a 30-year period, that would translate to returns roughly 25% higher than men's.

This is interesting, but remember that these data only refer to women who are already investing. As our research, indicates, there are about 50% more male investors than female investors. That gap is still far too wide, and there's little sign of it closing anytime soon. This is not about making the best decisions, or shooting the lights out, it’s about making the decision to make your longer-term savings work harder than they will in cash.

At Boring Money, we believe investing should be accessible to everyone.

And if you're new to investing and looking to get started...

• Check out our Best Buy ISAs or Best Buy Pensions.

• Saving for your children? Check out our Best Buy JISAs!

• Aged 18-39 and saving for a mortgage or retirement? Check out our Best Buy LISAs!