PERSONAL ACCOUNT

It’s time to level the playing field so that women can invest as effectively as men

What is the single biggest barrier to women investing? This was the question posed to a group of about two dozen people (mostly, but not all, female) from the world of personal finance, from journalists and bloggers to fund managers and regulators, who met this week to change the world.

It was the first session of the Women and Money Innovation Lab, a focus group set up by Fidelity, the investment firm, to come up with solutions to the problem of women being left behind financially.

The “pension gender gap” currently stands at 11pc. According to the Office for National Statistics (ONS), a typical man aged between 25 and 34 today will have saved almost £142,000 by the time he reaches the state pension age of 68. A woman in the same age range will have saved £15,000 less.

The gap widens with age: women nearing retirement, aged 55 to 64 today, typically have a pension pot half the size of a man the same age.

Considering that life expectancy is increasing, and that women tend to live longer than men, it is imperative that the gap be closed. Policymakers and the financial services industry must take responsibility for fixing this. What specifically can they do? Which brings us back to the question at hand.

The barrier to women investing certainly isn’t ability: a study by Warwick University Business School found that, over three years, female investors outperformed their male peers by 1.8 percentage points – and the FTSE 100 by 1.9 points. The problem lies elsewhere.

First, there’s the gender pay gap. The average man who works full-time earns £718 a week, according to the ONS. The corresponding income for a woman is £578 – a difference that means women have £7,280 a year less to save and invest.

Second, women have different financial needs: they are more likely than men to take time off work to care for children or an elderly relative – a truth not helped by the fact that men are less financially incentivised to do so – and may have concerns about locking up their money for a long time.

The problem isn’t saving; women actually hold more in Isas than men do, but hold it in cash rather than stocks and shares. Over the past four years, a person who invested their full annual Isa allowance in the FTSE All Share index would have enjoyed a return of almost 26pc. The same amount held in cash would have grown by 0.4pc on average.

Third, there’s the way we talk about money. Which is to say, we don’t. It is taboo to share our salaries or our financial woes or joys, meaning that those “in the club” – who generally aren’t women – have better access to this sort of information. And when we do talk about money and investing, the language is littered with industry jargon and obstructive metaphors that impede entry.

The Female Force (as I’ve taken to calling us in my mind; Marvel Studios, please contact me for film rights) came up with a number of ideas that could help eliminate some of these hurdles, clarify the language and simplify the system. These are some.

Change policies that put women at a disadvantage. A person can carry forward three years’ worth of unused pension savings allowance – but only

A film that adds glamour to investing might help – but