As we celebrate International Women’s Day today, it seems that women in the UK are considerably worse off than their male counterparts. That’s the finding from a new research study by Handelsbanken Wealth & Asset Management, which shows women holding an average of £147,000 in financial assets, compared to £250,000 for men.
Handelsbanken Wealth & Asset Management’s report, ‘Gender and generation: unravelling the wealth gap’ highlights how the gender divide in financial literacy and confidence in investment markets and products is impairing women’s ability to build wealth, while also exploring how younger and older generations are experiencing the financial world differently.
The research reveals that just 18% of adult women feel they received a good education on managing money in school compared to around a quarter (24%) of men. This contrast is starker amongst the younger generations, with nearly half (46%) of men under the age of 30 believing they had received a good education, compared to just 28% of women within the same age bracket.
This may go some way to explaining why more women than men in every age bracket admit to having limited or no understanding of financial products such as investments, mortgages, pensions, and insurance. Notably, over two thirds (69%) of women claimed to have little or no knowledge of investments compared to 43% of men, while over half (56%) of women admitted to the same for pensions, compared to 37% of men.
According to the study, women are more likely to have oversight of day-to-day household finances like groceries and bills (80% versus 69%), while men tend to take the lead on financial products such as credit cards (58% versus 52%), pensions (47% versus 31%) and investments (40% versus 19%). When it comes to finance, the traditional stereotype of women managing household budgets while men take care of financial products and services is appearing to linger.
Men were also found to be much more comfortable taking a high-risk, high-reward approach to investing, with women proving far more risk-averse. Nearly half (46%) of women stated they would feel uneasy or panicked about picking an investment with the potential for large gains but also the risk of large losses, with a third (34%) saying they would never pick a high-risk investment at all. Meanwhile, only 10% of men admit to feeling very uncomfortable with the idea.
Tellingly, wealthier consumers were more likely to embrace higher risk investment options. Four fifths (82%) of people with assets of over £100,000 felt comfortable with a higher risk product in their search for higher returns, compared with 68% of those with assets under £100,000.
The research also found that men are far more likely to feel confident offering financial advice to friends and family (41% versus 29%).
Given their lack of financial confidence, it comes as no surprise that women feel more comfortable discussing their finances with other women – potentially feeling less judged or belittled. The research showed that on average, over two-thirds (69%) of women would prefer to speak to a female financial adviser, although this does flatten with affluence – 71% of women with less than £100,000 in financial assets would prefer a woman, compared to 54% of those with over £100,000.
PK Patel, Head of Wealth Management at Handelsbanken Wealth & Asset Management said:
“Another year, another International Women’s Day – and yet more evidence highlighting the ongoing disparity between men’s and women’s finances across the country.
“The gender wealth gap created by historical and systematic factors will take many years to close out, particularly as young women still feel that they have not received a proper financial education. Building financial literacy and confidence among women of every age is key to turning the tide and reaching an equal level of wealth generation.”
“As wealth advisers, our goal is to address this disparity by empowering women to feel confident and secure in building a stable financial future best suited to their needs, be that through checking our own biases and behaviours as trusted advisers, holding women-centred events, or directing customers to the best available learning resources.”
Handelsbanken Wealth & Asset Management offers financial learning resources for interested parties through their Learning Zone.
This report follows Handelsbanken Wealth & Asset Management’s inaugural national Wealth Survey in 2023, ‘Can we solve the gender wealth gap?’, which also delved deep into the issues surrounding wealth, personal finances and long-term financial planning amongst men and women in the UK.
