The gender investment gap is starting to narrow

The number of women that are investing has risen since the pandemic, according to digital wealth manager Nutmeg.

Though men still make up the majority of investors, and historically always have done, the gender investment gap is gradually moving in the right direction.

Women currently make up 43 per cent of Nutmeg’s 200,000 clients, up from just 33 per cent in 2017 and 24 per cent in 2013.

“For decades, men in the UK have been far more likely than women to invest their savings,” Nutmeg personal finance specialist Annabelle Williams said.

“There is a combination of reasons why including, the gender pay gap, lack of role models and the perception that investing is a ‘macho’ behaviour that involves risk, bravado and even gambling. 

“That stereotype thankfully isn’t true for the majority of investors who make regular contributions to their pensions or stocks and shares ISAs.”

Williams noted that it is especially important for women who have savings to be open to investing to retain the value of their money as inflation rises.

According to Nutmeg, the start of the covid-19 pandemic marked a turning point for female investors, with the number of women who started investing rising by 5 per cent.

The risk appetite for the average female investor has fallen slightly since then though, as the typical portfolio risk has fallen from 6.14/10 to 5.65/10.

“Fundamentally we need to reframe what ‘risk’ means when it comes to money,” Williams continued.

While there has been a lower appetite for risk across the board since the start of the pandemic, the gender gap has narrowed to just 0.25 points compared to 0.59 points in 2017.

“There are several kinds of risk including ‘inflation risk’ — where rising prices erode money’s buying power; and ‘shortfall risk’ — where people face the threat of not having enough money to live off in retirement,” she said.

“Investing may help address both these risks, but any investment comes with the risk of financial loss — and that has to be weighed up against the threat of inflation and potentially falling short of being able to afford the lifestyle you want.”