Mind the wealth gap: why women still have less than men and what you can do about it

Women are holding on average £41,000 less in financial assets than men. While 50 years ago you would have had fewer privileges as women with your money, can the same be said of today?

It’s hard to believe that only 50 years ago, you would have been denied the right to buy your own property without a male guarantor — yes, you’d have needed a man to get a mortgage.

And it was only in 1975 that women could have their own bank accounts.

If that shocks you, then imagine also being refused service in a pub just because you’re a woman. It was perfectly legal to refuse to serve women in English pubs until 1982 when solicitor Tess Gill and journalist Anna Coote ensured this law changed. Despite the Sex Discrimination Act 1975, the pair had been barred from a Fleet Street wine bar for standing with their male colleagues, rather than sitting at the tables.

Thankfully, we’ve come a long way since then, but we’re still a long way away from being on a level playing field when it comes to our money.

Mind the money gap

One of the biggest challenges we face today is the glaring gaps — we’re talking money gaps. From pay to pensions and investments — here are the gaps you need to know about.

The gender pension gap 

It’s well documented that women retire poorer than men. Career breaks, lower pay and the fact we live longer all mean we will stop working with a smaller pension pot.

Research from Now: Pensions and the Pensions Policy Institute last year found women retire with the average pension savings of £69,000 — an astonishing £136,000 less than the average man. To retire with the same amount as a man (£205,000), women would need to work and save for an extra 19 years on average.

Pensions provider Scottish Widows says that based on the current trajectory, the UK is still at least 20 years away from closing the disparity.

But, the problem isn’t insurmountable and there are things you can do now to close the gap. This includes paying more into your pension if you can (especially if your employer matches your contribution when you pay in more), avoiding pausing contributions and starting as young as possible.

Jackie Leiper, managing director at Scottish Widows, says: “While the cost-of-living crisis might make pausing pension contributions seem tempting, this is likely to be a mistake in the long term. Making decisions about how to manage any shortfall in funds is a difficult one, but pausing contributions means you'll miss out on valuable employer contributions and the power of compound interest.”

Closing the gender pensions gap can help ensure you get the life you want to live when you stop working.

The investing gap

Gone are the days when investing was seen as something only men in pinstriped suits do. Women invest too. But, unfortunately, not as much, meaning there is a significant wealth disparity.

Research from Boring Money shows while 6.8 million women invest, this is significantly smaller compared to 9.9 million men who invest.

One of the easiest ways to start investing is with a stocks and shares ISA, but there’s a gap there too — with women heading to cash ISAs instead.

AJ Bell Money Matters, a campaign run by the investment platform AJ Bell to promote women’s financial independence, found women hold a million more cash ISAs than men. Men have around 500,000 more stocks and shares ISAs. According to HMRC, men’s ISAs are also worth at least £3,000 more than women’s.

This leaves a gender ISA gap totalling £6.6 billion.

“Many savers don’t realise that holding only cash for long-term goals can be a detrimental strategy, as the value is eroded by inflation over time,” Charlotte Tattersall, financial planner at wealth manager RBC Brewin Dolphin, says. “If you mainly have cash savings, you might want to consider investing, which may help shield your money from inflation and offers the potential for higher returns than cash over the long-term.”

Want to start investing to grow your wealth? See our simple guide on how to start investing.

The gender pay gap

Would you work for free? Of course not, but because of the gender pay gap, women essentially work for free for nearly seven weeks each year, analysis from the Trades Union Congress shows.

The gender pay gap stands at around 13% according to the Office for National Statistics. And it gets worse as we get older, too. Women between 50 and 59 have the highest pay gap (18.9%), while that figure is 17.5% for those aged 60+.

The gender wealth gap

Women are worse off than men, with women holding an average of £177,000 in financial assets, compared to £218,000 for men, according to a study from Handelsbanken Wealth & Asset Management.

Closing some of the gaps we have mentioned and addressing financial education can help.

Here are some resources to help you boost your financial Knowledge.

Books about money by women

• Invest Now: The Simple Guide to Boosting Your Finances by Kalpana Fitzpatrick
• What They Don’t Teach You about Money by Claer Barrett
• Money: A User’s Guide by Laura Whateley