Overcoming The Gender Investment Gap: An Interview With NatWest Group
Findings from research firm Kantar (2018) suggest that the value of investments held by women aged between 21 and 53 is just half that of men in the same age group.
“If women are less likely to invest, they could face further disadvantages in the long term,” says NatWest. “They may find it harder to be financially independent and could be more likely to face financial difficulty in old age because their pension savings are lower than men’s.”
Finance Monthly speaks to Camilla Stowell, Head of Client Coverage for Coutts, part of the NatWest Group, about the reasons behind the gender investment gap, the benefits women are missing out on, and how NatWest Group is helping to close the gap.
There are undoubtedly many factors at play but, ultimately, why are women less likely to invest?
The wealth industry has not normalised investing for women, who are more likely to talk about money with friends and family instead of financial institutions.
Findings from The Wisdom Council (March 2021) show that women now earn the same or more than their male partner in almost 30% of households in the UK, yet men are 10% more likely to hold an investment product than women in the UK according to the OECD. Boring Money also finds that only 13% of British women have a stocks and shares ISA.
These findings show that the investment gap goes beyond financial issues, and is inherently tied to women’s choice, freedom and security. That’s why it’s more important than ever to address the gender savings, advice and wealth gap, with financial institutions taking responsibility to engage with women in a way that is relevant to them.
What benefits are women missing out on by not investing?
The main benefits women are missing out are financial. Women continue to live longer than men, and yet have pensions provisions that are less than half of those of men on average.
It’s also about financial confidence. Life events such as divorce and bereavement are stressful enough without having to worry about money, which can add to the stress. On average, 51% of the financial advice sought in the UK by women was post-divorce.
Women are also missing out on the opportunity to support the causes that are important to them. Women tend to use money to look after everyone else before themselves, and to be interested in the wider community and environment for the next generation. Through investing responsibly they can use their capital to have a positive impact on the wider environment.
What is NatWest Group doing to close the gender investment gap?
NatWest Group has identified ‘improving financial capability’ as a focus area and is looking to address the savings and investment gap in two ways.
This includes supporting female entrepreneurs to promote wealth creation and identifying to help with Financial Health Checks to review their personal finances. At Coutts, we do this as a matter of course through annual client reviews which helps establish our relationship with clients.
We’re working hard to make sure that we talk to customers in a way that works for them, meaning we’re more inclusive and accessible and can help support financial goals. This has helped us gain a 185% increase in female investors in Personal Banking, a 20% growth in Premier Banking, and an 81% growth in Coutts, year on year. We’re also keen to support our female colleagues, running a series of events through our Wealth Gender Network.
How can women make the most of their investments?
The main recommendation is to start now. However much or little you can afford, it all adds up. Make sure you’re enrolled on your workplace pension or consider starting a small private pension if you’re not eligible for a workplace pension. And, lastly, don’t be scared to talk about money with your partner. Whilst it might feel uncomfortable, it’s essential to understand how your finances are being used and how to manage them.