Younger women don’t prioritise saving for retirement a new study found.
There is an investing gap in the UK and the reason could be as simple as women not thinking retirement is as much of a priority as men think it is.
Women under 34 would rather save for their holidays then save for retirement, research from Alliance Trust Savings found.
The pension and savings account provider found that while the top financial priorities for older and younger women are mortgages or rent payments, saving for retirement is only the fifth priority for those under the age of 34.
Instead younger women prefer to save for holidays and emergencies. In comparison, saving for retirement is the third priority for women over the age of 35. The survey of 2,000 retail investors also found stark differences in the saving priorities of men. Younger men prioritise retirement third after mortgages or rent and day-to-day essentials. For older men, retirement is the top financial priority.
“Unknowingly, women could be putting their financial futures at risk through fear of investing and not prioritising their long-term finances,” said Sara Wilson, head of platform proposition at Alliance Trust Savings. “With interest rates currently so low, inflation is eroding the value of cash savings in real terms. The gender pay gap is still very real and changes to the state pension age mean women’s pre-retirement incomes are now falling.”
The study is the second part of a Investing Gender Gap research initiative from the company to understand the investing differences between men and women. The firm also found that women are more risk averse than men, with women more likely to prefer cash savings. Only 50 per cent of females surveyed hold any investments compared to 70 per cent of men. Women also tend to be less confident, the study found. Less than half see investing as a calculated risk compared to two-thirds of men.
It’s important for the financial industry to step up and educate women about the importance of investing, says Wilson.
“For women’s sake, we can’t afford to wait,” she said. “The financial services industry needs to tackle it head on to give women much needed financial confidence now.”
This article first appeared at www.roboadvicenews.com