The £1.65 trillion investment gap – and why it matters

Authored on
12 Aug 2022



Across the UK, men have £1.65 trillion more saved than women. That’s an alarmingly large difference.

All the information in this article is from an independent survey of 5,000 UK adults carried out for AJ Bell by Opinium between 26 and 30 August 2021. It found that factoring in cash, pensions, investments and other non-property assets, the average woman has £49,000 put away. This seems like a decent amount, until we compare it to men’s average total: £114,000. That’s a £65,000 difference – which across the country means that women are £1.65 trillion poorer than men.

Even if you take out cash and look purely at the investment gap, men still have £50,000 more saved than women, which adds up to a £1.26 trillion gap countrywide.

Where does the problem lie?

Our survey looked at the average amount people say they have in their various accounts (for the full breakdown, see the table at the end of the article). The biggest gap is in pensions, where men have saved £55,000 on average and women just £19,000 – far less than half. We’ll delve into why these differences exist in future articles, but this huge differential is a big driver of the overall investment gap.

Even in cash savings – where you might assume the gap would be smaller – men have still put away much more. On average, men have almost £18,500 in their cash savings accounts, while women have just over half that, at £11,000. If we add together cash savings, cash NS&I accounts and cash ISAs, men have almost £35,300, and women just over £19,500.

So there isn’t a single type of savings account in which women have put away more than men. But this isn’t for a lack of willingness, as women are just as likely as men to have savings accounts. 65% of women and 66% of men hold a cash account, and around a third of both women and men hold cash ISAs.

It’s once we get to investment accounts that those numbers start diverging. Just 16% of women have a Stocks and shares ISA or Lifetime ISA, against 28% of men. It’s a similar story for a Dealing or general investment account (which is an account where you can invest, but without the tax perks of an ISA). Only 6% of women hold one, compared to 18% of men.

So, it’s partly that women are less likely to invest. But also that when they do save and invest, they are putting less away. On average, women save £180 a month, while men put away a far higher £306 a month.

Over just one year, that difference adds up to £1,512. Over longer periods, it adds up to much more. Even if you assume the money is going into a cash account earning just 1% interest, men will end up with almost £16,000 extra in their account after 10 years, and over £33,000 extra after 20 years.

And when the money is invested, this gap becomes vast. If we assume a 4% investment return – which is what markets have returned on average over the long-term, once we take off charges – after 10 years men will have nearly £19,000 more than women. After 20 years they’ll be ahead by almost £47,000. When investing for retirement over 35 years, the gap leaps to almost £116,000.

And now we start to see how such a gender investment chasm occurs.

So, is there a quick fix?

The obvious answer is: women should invest more. But for many women it’s not as simple as that. To help fix your own investment gap, here are three things you can do.

1. Consider how much cash you need

Are you in the camp of women who are saving enough, but putting it all in cash rather than investing? Cash is a great place for short-term savings or money you need quick access to, but for long-term savings it’s not great. When interest rates are as low as they are at the moment, inflation eats away at your spending power. So: work out what you need in the next five years as an emergency pot, and see how that stacks up against the amount you’ve got in cash. If you’ve got way more than that set aside, think about investing it.

2. Get started – now

If you’ve been thinking about investing and putting it off, then stop procrastinating! Opening an account and putting a small amount of money in doesn’t take that long and doesn’t need to feel like a massive commitment. If you’re uncertain about what you’re doing, you can start small and build up. Like anything, you’ll learn lessons along the way, but it’s better to start today than delay for another month or year.

3. Check your pension

You’ll probably have a few pensions spread around the place from different jobs you’ve had. Get hold of the paperwork and check how much is in your account. You might be pleasantly surprised, but if it’s looking depressingly small then put a plan in place to boost it. Just by adding £50 a month extra to your pension from the age of 30, you can boost your pot by £57,500 by the time you reach 65, assuming 4% returns each year. And even if you start at 40, you’ll give yourself an extra £32,500 by the age of 65.

The gender savings gap – by account

Cash savings account£18,449£10,862£7,587
Cash NS&I account£5,931£3,065£2,866
Cash ISA£10,876£5,752£5,125
Stocks and Shares ISA£13,724£5,087£8,637
General investment account£9,111£4,647£4,464
Source: based on an independent survey of 5,000 UK adults conducted for AJ Bell by Opinium between 26 and 30 August 2021

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These articles are for information purposes only and are not a personal recommendation or advice.