Career Woman

Why women’s money has to work harder than men’s

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Women on average spend more time out of the workforce than men do, and after also generally live longer after retiring from work. That means that women’s money investment has to work harder than men’s when it comes to taking care of those retirement years.

But a white paper published by Fidelity International reveals there are huge discrepancies between how women and men think about investment.

The research (comparing around 800 women and 400 men) reveals that 35.6% of women don’t actually know how much they will need to live comfortably in retirement. And those who do have a figure in mind, put it at around $1.025m — while men estimated more than $450,000 above that at $1.488m.

Fidelity International managing director, Alva Devoy, said the study highlighted that women have less appetite for investment risk, and lack confidence about understanding the financial sector.

Couple that with women on average having less superannuation, and the factors add up to obstacles that prevent women from making their money work as hard as it should to prepare for retirement.

“Why does this matter?  Despite recent progress, women are still earning less, they take career breaks and there are fewer of them in senior positions which has resulted in a superannuation gap,” Ms Devoy said.

“If women’s ability to earn and then save during their working lives is less than men’s, then it’s more important than ever that they have access to the tools to make their money work hard for them.  A lack of time and confidence, and fears about the risks, are all obstacles that are stopping women from believing that investing is for them.”

The survey results showed that 50.5% of women feel that they don’t have spare money to invest (compared to 35.2% of men). When it comes to thinking about their future, 42.2% of women are worried about it, and 52% don’t think — or don’t know — if they are on track to achieve their financial goals.

When it comes to risk aversion, 46.2% of women say minimising risk is their priority when it comes to investing (vs 26.8% of men), and more than double the number of women than men (33.8% vs 15.7%) say their appetite for financial risk is ‘very low’.

Only 28.3% of women are ‘very’ or somewhat’ confident when it comes to investing (vs 50.8% of men), while 58.8% of women say they have enough information or knowledge about investments (vs 73.5% of men).

However, results showed that women want to be financially independent, and not rely on their partners for financial security, with 32.9% of women keeping their finances separate from their partners, and 38.6% keeping some assets separate from those they hold jointly with a partner.

The report highlighted that the investment industry needs to better cater to women, and Ms Devoy said the industry also needed to find better ways to engage with them.

“As an industry, if we can find a way to better engage with women, we can in turn help them to unlock their financial power,” Ms Devoy said.

“That’s a change that will not just benefit women, but society and the economy as a whole.”

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