3 Reasons Why Some Women Don’t Invest and Why Men Take More Risks

It has been proven in numerous financial reports that in comparison to men, women make excellent savers, paying more into cash ISAs than their counterparts. However, less are committed to investing their well-earned disposable income which could generate long term financial gains and stability in later life.

A study from YouGov Omnibus reveals over 52% of women have never invested, compared to 37% of men, and that only one in five women said they were currently investing.

Financial firm Aegon also found that only 6% of women feel comfortable with taking investment risk compared to three times the number of men, of which one in four saying they will invest any spare cash in riskier investment opportunities, with just one in six women agreeing.

So why do women appear to be more risk-averse when it comes to investing compared to men? We look at three reasons that may contribute to this assumption.

The Pay Gap

Despite annual improvements in the gender pay gap it is still true that women earn less than men. According to the Office of National Statistics, in April 2021 women in full time positions earned 7.9% less than the average man.

Taking into consideration women are also more likely to take career breaks to start families, only 1 in 5 women return to full time work after having children. Recent studies in Germany suggests that a women’s lifetime income reduces by up to 43% after having a child with subsequent children only reducing this further.

Simply put, less earnings, generates less disposable income, less room for investments and less opportunity to take risk compared to men.

Lack of Confidence

One of the key reasons women say they are reluctant to invest their hard-earned money is due to the lack of confidence and knowledge.

Scottish Friendly report that 43% of women who save at least £100 per month were reluctant to invest in stocks due to the vast array of funds to choose from creating uncertainty.

Such uncertainty around investing negatively impacts their confidence to invest. In comparison, only 26% of men felt the same.

This lack of knowledge or understanding of investments seems to be linked to factors such as busy work and family life balance and a strong male presence in finance industry, causing women to steer away from investing.

Risk Adverse

There is a common perception that traditionally men are impulsive decision makers with a “go for it” attitude while women are more nurturing and careful planners who like to consider the options before committing, making them less inclined to invest in comparison to men.

Historical research indicates this assumption maybe true. But does it really matter if women are more risk-averse? Should it be a barrier to not invest?

Being risk-averse can actually be a great strength in investing, leading to a more conservative approach over medium or long-term strategies.

There is strong evidence that women who do invest out-perform their male counterparts by up to 1.8%, which over time equates to is a significant difference in return on investment.


Research indicates the finance industry have work to do in bridging the confidence gap in investing between men and women along with the attitude of risk in investments.

Inflation could be holding your cash back if prices are higher than the interest your make on your savings. So even though the actual amount in your savings would increase with interest, what you could buy with it may be less over time.

There is no right or wrong when it comes to investing. Understanding how comfortable you are with risk, how much risk you can afford to take and what are your long-term goals are great starting points when thinking about entering the world of investing.

If you are considering investing and don’t know where to start or feel your current stocks or shares don’t align with your financial objectives, then speak to Face to Face Finance – expert independent financial advisers based in Norwich.







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