Women are more likely to manage household finances than longer-term wealth decisions, although financial advice can significantly improve confidence and engagement with investing and retirement planning, according to new research from St. James’s Place.
The wealth manager’s latest Women and Wealth report, based on a survey of 6,000 people across the UK, found women continue to take a leading role in day-to-day financial management but are less likely than men to oversee decisions linked to long-term wealth creation and preservation.
While 84% of women said they are actively involved in managing daily finances, they were more likely than men to lead on household budgeting and spending decisions. However, women were less likely to take responsibility for investing, retirement planning and wills or estate planning.
The research found that 34% of women lead on investment decisions compared with 53% of men. Similarly, 32% of women take the lead on retirement planning, compared with 48% of men, while 28% are responsible for wills and estate planning against 36% of men.
CONFIDENCE GAP REMAINS
The findings suggest women’s growing influence over wealth is not yet being matched by confidence in managing longer-term financial matters.
St. James’s Place noted that women are expected to inherit more than half of all transferred wealth globally by 2048, while increasing numbers are also building wealth through careers and entrepreneurship.
Despite this, only 54% of women said they would feel confident managing a significant inheritance or financial windfall on their own, compared with 66% of men.
Confidence levels were lower still when it came to investing a windfall, with 44% of women saying they would feel confident doing so, against 60% of men.
The study also highlighted a continuing gender investment gap. Just 27% of women currently invest, compared with 43% of men, while only a third of women have a financial plan in place, compared with 42% of men.
Women were also less confident about making changes to investments and pension contributions. Some 44% said they would feel confident altering investments independently, compared with 63% of men, while 45% felt confident changing pension contributions versus 59% of men.
ROLE OF ADVICE
The report found a strong link between ongoing financial advice and improved confidence levels among women.
Women receiving ongoing advice were significantly more likely to feel confident managing a substantial inheritance or financial windfall than those without advice, at 82% compared with 52%. Confidence in investing a windfall was also higher among advised women, at 76% compared with 41%.
Those receiving advice were also more confident making changes to investments, adjusting pension contributions and amending a will.
The research further showed that women who receive ongoing financial advice are almost four times as likely to invest as those who do not receive advice, with participation rates of 77% and 22% respectively.
They were also more than twice as likely to have a financial plan in place, at 65% compared with 30%.
According to the report, women who invest are more than twice as likely to describe themselves as financially comfortable as those who do not invest. More than half of female investors said they were financially comfortable, compared with less than a quarter of non-investors.
Women who invest were also more likely to describe themselves as financially resilient.
Similar trends were evident among women with financial plans. Those with a plan were more likely to report feeling financially comfortable and resilient than those without one.
Claire Trott, head of advice at St. James’s Place, said: “The gaps we can see aren’t driven by women lacking interest in money. In fact, women are highly involved in managing all aspects of daily finances.
“The challenge is that too few are managing longer term financial decisions that shape their future wealth, from investing to estate planning to pension decisions.
“This is where financial advice can make a real difference. As highlighted by our research, advice can help women build confidence, understand their options and take practical steps towards their long-term goals, whether that is investing, planning for retirement, managing an inheritance or passing wealth on.
“As women’s influence over wealth continues to grow, advice needs to reflect the realities that shape their financial lives, from career breaks and caring responsibilities to changing family circumstances.
“Helping women connect financial planning and investing to the life they want to build will be key to increasing long-term engagement and improving financial outcomes over time.”
