Closing the investment gap between men and women could unlock the post-pandemic recovery – iNews

We know that the Covid-19 pandemic has disproportionately affected women financially our data shows the gap between men and womens savings hit 50bn during the year to March 2021, with women putting away 2,628 on average, compared with 5,335 for men.

But what has been less discussed is how womens emotional relationship to their money has changed.

Women have now joined men in rating financial independence as the biggest contributor to their self-esteem and wellbeing.

This matters particularly for financial services companies but also the broader UK business community because if women start investing more of their earnings, there is an exponential benefit to the UK economy which in turn will support the post-pandemic recovery.

If women start investing more of their earnings, there is an exponential benefit to the UK economy which in turn will support the post-pandemic recovery

Our data at Kantar indicates that converting just 1 per cent of womens current savings into investment products could unlock 98 billion of financial capital.

By putting this into circulation, rather than squirreling it away in savings accounts which tends to be their default, women cannot only unleash greater financial rewards for themselves, but also benefit economic markets and in turn stimulate GDP.

So, whats stopping women from realising this financial potential?

Social expectations and structural economic issues continue to make it harder for women to save in the first place.

They face lower average earnings and undertake more unpaid labour than men, such as caring for children and elderly relatives, which can limit ability to earn. Womens employment can also be more precarious.

For those who can build up financial reserves, there are cultural barriers to making that money work as hard as it could. Women are far more likely to save in cash rather than invest.

They are less confident than men about long-term financial planning and more risk aware, perhaps reflecting the greater challenges they face to put money aside.

Investing is still seen as a mans world even though many women will already be investing (albeit perhaps more unconsciously) through their pensions.

Our analysis of financial products communications found that it is exacerbating these gendered differences.

For example, women dont find the colder, more materialistic promotion which dominates investment advertising as engaging.

They react better to holistic messaging that talks about the positive life outcomes that investing can unlock, not just wealth accumulation.

Financial services brands are missing a trick by failing to speak directly to women and accommodate their needs. They need to adapt their offer and communications to cater for a wider, more diverse customer base.

Using more emotive, human language on the benefits of investing would be a big step forward.

Jargon-free content would also go a long way to make women feel less excluded and address their relative lower financial confidence.

Women are nervous to expose a lack of knowledge about investing, and finances generally, and this fear affects their interactions with advisers too.

They say these experts understand them less well and they want to see greater empathy towards their needs.

As diversity within financial services businesses improves, fresh perspectives will naturally come to the fore. Appealing to a broader customer base will be easier as organisations own workforces better reflect society.

But brands should always be asking themselves questions like is the language and messaging they use as inclusive as it could be? Is it unintentionally reinforcing stereotypes? Are they aware of unconscious bias?

The balance that brands will need to strike is how they continue to appeal to existing customers while also reaching a wider audience. Its a question worth spending time over. This analysis and change of approach will drive better outcomes for the sector, its customers and ultimately benefit the UKs economic performance too.

Amy Cashman is executive managing director for Insights at Kantar UK & Ireland

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Closing the investment gap between men and women could unlock the post-pandemic recovery - iNews