Overview
While women invest less than men, they are more worried about their financial future. In fact, 42.2 per cent of women worry about this daily or weekly, and more than half (52 per cent) don’t think or don’t know if they are on track to achieve their financial goals, according to our report.
Meanwhile, more than a third of women (35.6 per cent) don’t know how much money they need to retire. Of those who think they know, they calculate they will need around A$460,000 (US $322,565) less than men estimate - A$1.025 million vs A$1.488 million, despite the fact that women are likely to live longer.
Savings accounts over stock markets
Not enough women are investing in the stock market. They feel that the investment industry is not tailored to them, are more risk averse and prefer the perceived safety of cash. Half (49.4 per cent) felt that they would be better putting their money into a typical savings account than investing it elsewhere. Australia's not alone; a similar study found 56 per cent of women in the US also left nearly all their savings in cash or bank accounts.
Why does this matter? Despite recent progress, women are still earning less, they take career breaks and there are fewer of them in senior positions, which has resulted in a superannuation gap.
If women’s ability to earn and then save during their working lives is less than men’s, then it’s more important than ever that they have access to the tools to make their money work hard for them. A lack of time and confidence, and fears about the risks, are all obstacles that are stopping women from investing.
Our report, based on a survey of 815 women and 407 men, shows that half of women (50.5 per cent) have no spare money to invest (compared to 35.2 per cent of men). Meanwhile, almost half (46.2 per cent) say minimising risk is their priority when it comes to investing, with a third (33.8 per cent) saying they have a ‘very low’ appetite for financial risk (compared to 26.8 per cent and 15.7 per cent of men respectively).
Less than a third of women (28.3 per cent) describe themselves as ‘very’ or ‘somewhat’ confident when it comes to investing, compared to 50.8 per cent of men. And they tend to feel investment communications are ‘complicated’ (52.6 per cent), with a quarter finding the material ‘intimidating’ and just over 20 per cent saying it’s ‘tailored to men’.
Women focus more on goals than financial gain
One of the most interesting findings of the research was the way that women engage with their money. We found they tend to focus more on goals rather than financial gain; having enough money to provide for their families, paying off their mortgage and maintaining a certain lifestyle in retirement all ranked as top priorities. As an industry, if we can find a way to better engage with women, we can in turn help them to unlock their financial power. That’s a change that will not just benefit women, but society and the economy as a whole.
