“Mind the gap!” How your gender can affect your financial future

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There are two important factors when it comes to planning your financial future. The first is the benefit of expert professional advice, and the second is making sure you invest your money appropriately.

Both can be crucial, especially when it comes to planning for your retirement.

However, two recently published research reports confirm an alarming gender imbalance when it comes to both. They reveal that men are much more likely to speak to a financial adviser than women, and also more likely to invest their money rather than simply put it in a savings account.

Men are more likely to seek professional financial advice than women

Research recently published by Canada Life has revealed that men are more likely to take advice from a financial adviser, or look at a money advice website, than women.

The research confirmed that – by 42% to 27% – women are more likely to use other family members as a source of advice than speak to an adviser. Only 1 in 5 would look at a government website or other specialist online source of advice.

In comparison, only 27% of men would speak to their family compared with nearly 2 in 3 who would get advice from an adviser or financial website.

For both men and women, the most common reason for seeking advice was cited as “pensions and retirement planning”.

There was a big discrepancy when it came to investment advice. Only 35% of women would look for advice in that respect whereas, for men, the figure was 47%.

Considering that research carried out by Royal London, in association with the International Longevity Centre, found that people who took financial advice were better off by an average £47,000 over a 10-year period, you can see why women being less likely to seek advice could harm their long-term wealth.

The investment gap and the importance of investing

Further evidence of the gender gap when it comes to investment advice comes from another research report.

A study published in the Independent confirmed that a third of women still preferred to keep their money in a cash account than to invest it.

The report also disclosed that men are twice as likely to invest than women.

With inflation now at over 6% and projected to get as high as 9% later this year, your investment strategy is crucial when it comes to your future wealth. Inflation reduces the purchasing value of your money, and investment growth is one of the best ways to counter this.

Of course, you may want to hold some cash – perhaps your emergency fund – in a savings account. Given that you may need this at short notice, an instant access account is the best place to keep this.

Beyond that, you should consider investing any money you hold for the medium to long term (typically five years or more).

What these findings reveal is that, if women are less likely to invest, they could damage their long-term prospects. Cash savings are unlikely to keep pace with the rising cost of living, meaning women may not accumulate the wealth they need to live their desired lifestyle in later life.

The value of ongoing financial advice

There’s no “one-size-fits-all” solution when it comes to financial advice. As everyone’s circumstances are different, and planning your financial future and how you invest your money will be unique to you, it’s essential that you get suitable advice.

For example, two of the key factors when it comes to building your investment portfolio will be:

  • How much risk you’re prepared to accept on your investments
  • The amount of loss you can tolerate in order to invest for your financial goals.

Based on those two criteria, where and how you invest your money will be important.

Also bear in mind that using a tax-efficient vehicle such as a pension or an ISA can add real value to your fund.

If woman do not seek advice, or don’t invest their money appropriately, it could have a damaging impact in the long term.

If you would like to talk to us about any of the issues you’ve read about in this article, then please get in touch and we’ll be happy to help.

You can email us at enquiries@blackswanfp.co.uk or contact your adviser on 020 3828 8100.

Please note

This article is for information only. Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investment can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

We aim to keep our clients up to date on interesting and relevant financial news.

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