Six Facts About the Investing Gender Gap

When it comes to inequality between women and men, the pay gap tends to take the limelight. But what if there were significant differences between with how men and women invest the money they do earn? 

In this article, we’ll share six facts about the investing gender gap.

A lower proportion of women participate in investing compared to men

A survey conducted by NerdWallet, found that in the US only 48% of women invest in the stock market or through investment firms, compared to 56% of men. The gender gap in the UK is even wider, with only 27% of women investing compared to 47% of men. 

The NerdWallet survey asked questions of more than 2,000 adults, 1,004 of which were investing in the stock market online via trading platforms or through investing firms. 

Women are less than half as likely to prioritise investing

In a survey run by YouGov, a smaller proportion of women (21%) said that investing is very important to them, compared to men (31%). On the other hand, a larger proportion of women (65%) said that saving is very important to them, compared to men (56%). When asked what their top priority was, women were less than half as likely than men to give investing as their answer.

Women are less financially literate than men

A study from Allianz showed that there’s a persistent gender gap when it comes to financial literacy. In a study in which participants were asked to answer nine questions, women scored a mean average of 3.7 correct responses, whereas men scored 4.5. 

More women see investing as high-risk than men

Investing means taking on risk as well as the potential for reward, but that doesn’t mean it’s high stakes gambling. 

Yet some women may perceive investing this way. According to a study conducted by BNY Mellon, 45% of women say that investing money in the stock market is too risky for them

The truth is that not investing can also be risky, as inflation slowly erodes money’s purchasing power without a large enough interest rate to keep pace. This fact could put women at a disadvantage where personal finances are concerned, given that women tend to prioritise saving over investing.

Women are more likely to feel confident about investing

Emotions are likely to be turbulent when it comes to investing. Yet the NerdWallet study showed that this is more true for women than for men. Only 22% of American women, said that they felt confident about investing, compared to 41% of men. 

The research suggests that women are more likely to feel anxious (29%), confused (23%) about investing compared to men (22% and 17%, respectively), as well as twice as likely to feel afraid.

Women are more likely to use a portfolio manager

According to data from the NerdWallet study, women are more likely to delegate portfolio management to someone else. In fact, 66% of female investors said that someone else manages at least some of their investments in the stock market, compared to 55% of male investors. This should come as no surprise given the previous statistics showing that women are less financially literate and tend to feel less confident about investing.