The gender investing gap

There are a number of factors underpinning the gender investment gap. Clearly, lower average rates of pay is one – but there are other issues. Women engage less with investment providers than men and, in general, have an aversion to risk taking. 

But failing to invest can itself be risky. In an economy where savings interest rates are lower than inflation, holding spare money in cash – whether in a current or savings account – means that your capital could end up losing value in real terms. 

Of course, it is important to keep enough funds in an easy-access account for day-to-day spending and emergencies.

On the other hand, once emergency savings are taken care of, putting money into investment funds could give the opportunity for greater returns. Investing over the longer term – usually at least five years, gives investments the opportunity to grow and overcome bumps in performance.

In the past, stock markets have almost always outperformed cash over long periods. However, it is important to remember that past performance does not give an indication of future performance and cannot be taken as such.

Greater financial security isn’t the only reason more women should consider investing; Boring Money also found a link between greater financial independence and higher levels of self-esteem.

Another issue that puts off many would-be investors – both men and women – is the perception that investing is complex. With so many different types of investment options to choose from – ranging from company shares to government bonds and even commercial property – making a start can be daunting.

NatWest Invest has a straightforward range of Personal Portfolio Funds, which are all ready-made and have differing levels of risk. The defensive fund, for example, contains a greater proportion of assets such as bonds, which tend to be less volatile. This means that, while there may be less scope for bigger returns compared to the adventurous fund, the chances of losing money could be lower. 

Of course, the value of your investments can go down, as well as up, and you may not get back all that you invest, so it is an important point to consider when investing. Putting cash into a fund with a range of assets could be a good way of managing risk.

You don't need to have a big lump sum: an account can be set up with NatWest Invest with an initial lump-sum payment of £50, or by choosing to pay in from £50 a month. 

Another factor to bear in mind is the potential benefit of holding investments for as long a period as possible – so by starting early, even if you are only putting aside a small amount every month, you could increase your chances of a sizeable nest egg.

Whether you’re an experienced investor or just finding out what investing is, we’ve got a range of articles to help you understand more about investing.

We regularly update our articles depending on what’s happening in the market so check back for future updates.