Women who invest: attitudes to investing in the UK and across the globe

Generally, women and men tend to make different financial decisions. According to Finance Buzz, in America alone, women experience a $80,000 (approximately £70,800) pay gap in comparison to men, due to a wide range of factors. Despite investing being a great way to build wealth and protect your future finances, research has shown women are less likely to consider investing in their lifetime than men. In fact, nearly 34% of women have yet to begin their investment journey, as compared to 24% of men.¹

But with there being a considerable growth in female entrepreneurship in recent years, will we begin to see a larger share of women in the investment space? In order to move towards that outcome, it's important to ensure that service and product providers are addressing the wants and needs of both women and men.

In this article, we take a look at how women’s investment habits in the UK compare to the rest of the world, what women in the UK typically choose to invest in, and the gender split for investors across the globe.

Table of contents:

Women who invest

1. What do women in the UK think about investing?
2. How do women in the UK approach investing?
3. Are women investors on the rise?
4. At what age do women start investing?
5. Female leveraged investors across the globe
6. Want to start your investing journey?

What do women in the UK think about investing?

According to Finder, at the beginning of 2022, less than half of women in the UK were actively opting to invest. However, over a fifth of survey respondents (27%) said they intend to begin their investment journey in 2022, indicating that there is room to grow. Of the share of women who invested in 2022, stock trading (or share dealing) has proven to be the most popular choice, with 32% of women investors including stocks in their investment portfolio in 2022.²

How do women in the UK approach investing?

According to Coutts, the prime difference between female and male investors is their end investment goal. For the majority of women already in the investment field, protecting their assets and prioritising financial security is their main priority when it comes to investing. Women also tend to favour long-term investment strategies and are less likely to be involved in short-term trading.³

As stated by Finance Buzz, females are said to reach their financial peak earning power at the age of 44, with an average salary of $66,700 (around £50,900). In comparison to their male counterparts, who commonly reach their peak earning power at age 55, with an average salary of $101,200 (approximately £88,400). With less spare cash, women are prone to invest less money, both when starting out and throughout their investment journey. However, studies show that this limitation could ultimately prove to be a blessing in disguise. Research suggests that investing more prudently lowers the overall risk elements involved.¹ Research suggests that in general, women tend to invest more conservatively than men. A 2021 Fidelity study found that the average woman keeps 68% of her portfolio in cash and cash equivalents, compared to 59% of the average man's portfolio.

IG research has shown, that on average, women spend more time researching and analysing their investment strategies than men. And when it comes to gathering investing information, women prefer doing so via YouTube (21%), word of mouth (20%) and Instagram (19%)².

Using IG’s own internal trading behavioural data for the UK, we have compared the amount of time UK women spend on making a decision to invest, compared to their male counterparts.

Time spent researching before making an investment decision

Our data has highlighted that UK women are marginally more likely to spend over a week researching an investment decision as compared to men. Additionally, 11% of women already in the investment field are said to conduct two to three week’s research ahead of investing, as opposed to only 8% of men. These stats speak to a greater level of caution when it comes to investing.

Are women investors on the rise?

IG’s investment trends data highlights that there has been a steady increase in the proportion of female investors in the last six years, with a 5% growth since 2016.

This is an encouraging sign for those that want to see a move towards greater gender-parity across the investment field. Studies have shown that women’s portfolios outperform men’s by an average of 1% per year. This could compound into a 5% average difference in favour of women-made investments in just five years’ time. With financial planning being a main goal for many potential women investors, it’s important that wealth management companies do more to target what’s driving women’s investment goals, in order to supply them with the correct tools and resources.⁴

At what age do women start investing?

Our new client investors in the UK in 2021

When looking at our own data, it’s apparent that women aged between 18-24 are one of the least likely age groups to begin their investing journey, making up just 6% of new investment accounts in 2021.

The most significant uplift occurred between the ages of 35-44. This age range accounted for 32% of all new female investors. Along with the 25-34 age bracket, women aged between 25-44 accounted for over half (62%) of all first-time female investors. Interestingly, women aged 55+ are marginally more likely to begin investing than men.

This set of data lends itself to the assumption that women are much more cautious in their approach to investing and that, like their male counterparts, they tend to invest more as their disposable income increases. More often than not, women are known to typically feel less confident when making investment decisions than men. However, recent findings suggest that confidence in investing increases with age; ‘While 46% of millennial women feel equipped to handle investments, the same holds true for 52% of Gen X women, 54% of women among baby boomers, and 60% of women of the silent generation.’ ⁴

Learning the ropes when it comes to informed investing takes time. It’s a gradual process where experience and maturity are invaluable tools. This in time can reap huge long-term financial benefits.

Female leveraged investors across the globe

Across the world, people are investing every single day. Investments made by men make up a huge proportion of all investments in each country listed in the above graphic. In fact, when looking at our data, we can see male leveraged investors outweigh females in every single country. Leveraged investing is a technique that seeks potentially higher investment returns by using borrowed money through various financial instruments like Contracts for Differences (CFDs) or borrowed capital.

The countries closest to bridging the gender gap are based in Asia, with Taiwan, Singapore, and Hong Kong being the only three countries to have female investors making up 20% or more of the gender split.

Western countries have the lowest number of female investors, with 11% in the US, 10% in the UK and just 2% in Sweden.

Overall, it’s clear women require more representation within the investment space, in order to reduce the gender gap.

Female investor gender gap across the globe

Want to start your investing journey?

Investing can be extremely rewarding, not to mention profitable. However, with a vast amount of websites and platforms out there, beginning your investment journey can seem daunting. With this in mind, we’ve refined a selection of prime investing resources for you to learn from. Combined with IG’s out-of-hours trading, you gain extended access to financial markets, potentially allowing you to maximise profit-making opportunities and minimise any risks on existing positions.

Sources

¹ Finance Buzz, Women and Investing: The Surprising Statistics You Should Know [2022]
² Finder, Female investors in the UK
³ Coutts - The Future of Investing is Female
⁴ Motley Fool, Women and Investing: 20 Years of Research and Statistics Summarised