Bridging the gap

The fact is, there are subtle yet important differences in the way the genders think about and react to their financial worlds, which in turn drive the investment decisions they make. 

Of course, we know not all women are the same. Your upbringing, personality, lifestyle and attitude to risk means you have an approach to money that’s uniquely yours. But to help you get engaged in investing in the right way, we have a responsibility to understand what, in general, tends to makes us women tick differently to men.

One of our studies reveals how our different feelings about finances and the future¹ are creating an attitude trend: 

• Women are more likely to worry about finances
• Women are more likely to be concerned about the future
• Women are less likely to consider themselves financially knowledgeable 
• Women are less likely to take responsibility for household financial decisions

So what does this mean? It means the way different genders feel about money can go on to affect the way we engage with it. And it’s even clearer when you start comparing the specific investment choices women and men make.

Take a look for yourself. Here’s some figures from our recent customer survey² that show how these different gender attitudes are creating an investment gap.

You can see it in the number of people who are investing. Less women have investments – 12% compared to 19% of men. 

You can also see it in our approach to ISAs. More women have cash ISAs – 72% compared to 66% of men. But less women have stocks and shares ISAs – 28% compared to 42% of men.

You can see it again when it comes to retirement savings. Fewer women have a personal pension of any kind – 20% don’t have one compared to 7% of men.

Does this mean women are bad at investing? Worse than men at investing? Absolutely not. Cue a big sigh of relief from your future self. In fact, when we do invest, we’re more likely to outperform men³ as we’re less overconfident and are more likely to hold onto our investments for longer. Cue a mini cheer. 

So what is it that’s making women shy away from the stock market and potentially stopping you from getting started?

It comes down to the fact that women aren’t more risk averse. We’re just more risk aware. And that’s a good thing, although it inevitably creates some natural barriers between us and investing. 

Let’s take a look at some of these investment sticking points:
 

Motivation - we’re driven by different things, with women typically more concerned about preserving the value of what we already have rather than growing our money. Our perception of investments can steer us towards ‘safer’ bricks and mortar rather than ‘riskier’ equities. Cash rather than investments. 

Time - we like to take our time to consider the bigger picture before we make a decision. Why rush in when you can take research materials home, appreciate all the potential implications and visualise what the money will be spent on.

Support - we feel more confident when we can talk financial matters over with people just like us. This can be your other half, family or close friends. And bank advisers can be rather good at sharing your journey too. But the less support we get, the less confident we are about investing. 

Jargon - we’re more likely to be put off by financial terminology we’re not familiar with. It gets in the way of our understanding, especially we like as much clarity and explanation as possible. Too much jargon can make an investment opportunity feel like it’s not aimed at you.

If these natural barriers are all part of who women are, maybe we should just accept that women are naturally less likely to invest than men. Right? No chance. Bridging the investment gap is something that we, as your bank, have a responsibility to do. After all, it’s something that would empower more women to access those financial opportunities that could positively affect their futures.

For starters, it’s not right that you might be missing a very important trick when it comes to growing your money. Interest rates are at record lows and inflation is rising, which means you could be losing money in real terms.

It’s true, investing comes with risk. This means you may not get back what you put in so you’ll need to consider your options carefully before deciding where to invest. Also, you should be prepared to hold an investment for at least 5 years as most are considered as medium-to-long-term commitments.

Yet despite these two caveats, you could be holding yourself back if you’re not considering investing as one of your long-term options. And that’s not all. There are other reasons why we should be helping more women to invest.

Women take time out. You’re more likely to take a career break to care for an ill relative or look after children than men. Over 50% of working age mums have taken parental leave compared to 17% of working age dads¹. This can’t help but affect their savings.

Women live longer. According to the Office for National Statistics⁴, the average woman will live to 82.9 years and the average man to 79.2 years, so it’s important to have your own retirement plan. 

Women receive less state pension. About £29,000 less⁵ over a typical retirement because of pay gaps and career breaks. 

Whatever your gender, we wholeheartedly encourage you to learn how to take care of your future. If you’re a woman, it’s arguably even more important that you invest in yourself and take action today to give your future a present.

We have an investment gap where only 2.4 million of our 11 million investing customers are women. We have a range of investment barriers that are getting in your way. And we have some seriously good arguments as to why more women should be investing in their futures. 

So what are we doing about it?

• Creating a new humanised website. You told us you didn’t like jargon and we listened. So it’s out with the old, and in with a new website where you’ll be greeted by clearer information that’s written in plain English. Discover a range of fresh and honest articles that are completely focused on helping to build your knowledge and knowhow. 
  
• Making advice more accessible. You told us that getting financial support is important to you. Thanks to new technologies, we’re making high-quality, regulated investment advice accessible to more people. Whether online, by phone or in person, a trusted financial adviser could help increase your confidence and give you the clarity and support you need to make those big decisions. Fees and eligibility criteria apply.
  
• Teaching children the value of money. Our research shows that financial attitudes and behaviours get established at a young age. As part of our financial literacy programme, we’ve partnered with an award-winning author to write a book that encourages young girls to achieve their financial goals themselves.
  

Of course, it’s not just about women. We passionately believe that everyone could benefit from investing in their own futures. That’s why we’re building a bridge to welcome everyone into the land of investment. 

Whatever your gender, race, age, culture, preferences and level of confidence, we want to help you to widen your financial horizons. Whenever you’re ready, we’re here to help you think big by starting small.

by Christine Foyster | Head of Premier Wealth Propositions

¹Source: HSBC, Future of Retirement, Bridging the Gap, 2018

²Source: HSBC, Wealth Insights, Talking Everyone’s Language, 2018

³Source: Reuters, Why Women Are Better Investors: Study, 2017

⁴Source: Office of National Statistics, National Life Tables, 2017 

⁵Source: Which? Revealed: the £29,000 state pension gender pay gap