Women’s long-term savings at risk: 87% choose cash accounts over investments 

by | May 26, 2023

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New research released today by online investment service Wealthify reveals that nearly nine in ten women (87%) are being put off from investing due to a preference to put their money in a savings account. 

A staggering 74% of women haven’t invested because the thought of it makes them nervous (compared to just 58% of men) and a further 73% of women stated that they haven’t invested before because they don’t think they are knowledgeable enough (compared to 67% of men).  

The study, which surveyed 2,000 Brits who have at least £5,000 in savings but haven’t invested before, looked to uncover the main reasons why people aren’t investing and aimed to encourage more people to start investing.  

Is your money better off in a savings account?  

 
 

With a large percentage of women (87%) opting not to invest because they’d prefer to put their money in a savings account, Wealthify’s research explored the main drivers behind why people are choosing standardcash saving accounts over investment products such as Stocks and Shares ISAs. 

The main reasons women preferred to place their money within a regular savings account were that they want to access their money quickly (95%) and believe there is less risk of losing money (92%). However, regular savings accounts may not always be the best option, experts say.  

In the study, Wealthify presented respondents with a chart that compared the return of investment on a sum invested in the FTSE 100 over the past 10 years, compared to how the same investment would have grown in a cash savings account over the same time period. 

 

Over half (52%) of women agreed that after seeing how the investment would have grown over the past 10 years, they feel more confident about investing their money. 

Andy Russell, CEO at Wealthify comments: 

“There’s no denying that savings rates are particularly attractive at present. However, when we look at the rate of inflation – which remains in the double digits – there’s a huge gap between that and the interest rates on cash savings accounts.  

 
 

“So, if the interest rate on your cash savings is below the level of inflation – which is extremely likely – over time, your money will lose value, as you’ll be able to buy less with it. That leaves us with the question, what’s the real risk – investing your money for the long term, or leaving it in a cash account to be eaten away over time? 

“It’s generally advised that once you have your emergency savings in place – which is the equivalent of at least three months’ outgoings – any money you don’t need in the immediate future is invested for the long term. And by ‘long term’, we mean around 5+ years.”  

The main barriers to investing 

 

Wealthify’s research looked to identify some of the key barriers deterring women from investing, finding that a fear of losing money (86% of respondents), a fear of getting scammed (75%) and not knowing where to start (74%) were all widely reported blockers.  

      The top blockers      Women     Men  
    Preference to put their money in a cash savings account   87%   82% 
    Fear of losing money   86%   84% 
    Fear of scams   75%   67% 
    The thought of it makes them nervous   74%   58% 
    Lack of knowledge   73%   67% 
    Lack of trust where their money would be going   72%   67% 
    Worry that they won’t be able to access their money   71%   66% 
    The process seems too complicated   66%   54% 
    Doubt that investments would benefit them financially   51%   53% 
    The risks outweigh the benefits   48%   52% 

The challenges women face in the investment landscape 

Despite women being more likely to have financial goals than men, with 61% of women saying they have definite savings goals for the future (compared to 49% of men), Wealthify’s research found that many are hesitant about investing their money (just 47% of women have considered investing in the past year, compared to 50% of men). 

 

The study shows that 87% of women would prefer to put their money in a savings account rather than investments and concerningly, more than one in four (26%) women believe that investing is not an option for them.  

The study found that a lack of dedicated financial education at school may be one of the underlying factors causing this lack of confidence. One in three women (31%) stated that they don’t feel confident investing because of the lack of education on investments in school or growing up. 

Getting more women to invest 

 

Interestingly, the majority of women (90%) say they would be more likely to invest if they were more knowledgeable about it and another 89% say they would be more likely if there was a clear route as to how to do it. 

Aligning investing with making a positive impact is also something that might make more women consider it. Over seven in ten women (73%) state that they would be more willing to invest if they felt the funds or investment vehicle were supporting good causes. 

Michelle Pearce-Burke, Co-founder at Wealthify comments: 

“Women have made great strides to get to the place we are now in terms of equality. But it worries me that in certain aspects of our lives, we’re still not even close. In fact, when it comes to the gender wealth gap there is a stark difference – only 33% of the world’s wealth is held by women***.  

“For various reasons, women are often at a financial disadvantage to male counterparts – whether that’s salaries, pensions, investments or savings. And the barriers to investing play a key part in this.  

“At Wealthify, we’re committed to breaking down as many of these barriers as possible – that’s why we offer investments from as little as £1, low fees, jargon-free communications, plus lots of educational articles and tools. You don’t need to be a financial wizard to start – just tell us your preferences and our team of experts will do the rest. But if you do want to learn more about investing, we offer the resources to help you do so.” 

To see the full research, go to – https://www.wealthify.com/blog/fear-of-investing-dispelling-investment-myths-as-new-research-shows-66-of-brits-are-nervous-about-investing  

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