The gender pay gap may prevent women earning as much through their investments as men, affecting women’s interning potential in the long term.
According to research analysis by Fidelity International, 43 percent of women save into a cash ISA, but only 9 percent – that’s nine out of every 100 women – invest in a stocks & shares ISA.
This tendency to prefer the ‘safe haven’ status of cash over the stock market, which generally gives lower returns, coupled with the significant gender pay gap, means the female half of the population suffer a glaring gender investment gap.
Fidelity’s analysis reveals that a male investor would have enjoyed a return of £43,446.48 over the past 20 years if they invested £1,000 each year into the FTSE All Share. In comparison, a female saver saving an equivalent amount into the average UK savings account over the same period of time would be left with a return of £18,963.09; representing a significant shortfall of £24,483 compared to their male counterpart.
Maike Currie, investment director for personal investing at Fidelity International, comments: “A lot has been written about the gender pay gap, but less about how this impacts women and their wealth over the long term. If you earn less, you have less to save and you’re often less willing to take risk with the money you do have.
“Women are far more likely to leave their savings languishing in cash than invest in the stock market. Consequently, they’re left facing a double whammy of having less to invest than their male counterparts and then suffering paltry returns on the money they do invest.
“The cost of women getting paid less than their male colleagues has a knock-on effect on their long-term savings – it means smaller pension pots and investments. This is a bitter pill to swallow when you consider that on average women are expected to outlive men. The gender pay gap might be beyond the control of most of us, but where we invest isn’t.
“To stand any chance of having your savings and pension pot keep abreast of inflation and rising longevity, you need to look towards the stock market,” Currie recmomended.
According to EU statistics, for the European economy as a whole, women’s gross hourly earnings were on average 16.3percent below those of men in 2015.