Breadwinners and Losers: Is women’s lack of confidence to invest putting their financial future at risk?

The latest Disposable Income Index (DII) published this week by Scottish Friendly has revealed a stark contrast in the level of confidence between men and women when it comes to money matters, while also highlighting a clear difference in their approach to saving and investing.

The new report found less than one in three (31 per cent) women say they are very or extremely confident when it comes to managing their finances, compared to nearly half of men (46 per cent).

These contrasting attitudes can be clearly seen when comparing the reasons for not putting money aside in stocks and shares ISAs, which are used by 25 per cent of men and only 12 per cent of women. For men the most likely reason is they are waiting until they earn more money (20 per cent) followed by a preference for the security of cash ISAs and bank/building society products (17 per cent). The most common reason given by women was that they were afraid of losing money (20 per cent), followed by a lack of full understanding (18 per cent).

The quarterly report, compiled in conjunction with leading think-tank the Social Market Foundation, shows that the median UK household has £1,105 left each month after paying for absolute essentials of housing, energy, water and a broader basket of goods including groceries, transport, childcare and broadband internet. These goods are required to play a full role in modern society. Money left at the end of the month is available for other key items like clothing, furniture and savings as well as luxuries like holidays.

At a time when the vast majority of cash ISAs, if not all, are offering returns below the current rate of inflation (3 per cent), women could be losing out on the prospect of potentially greater returns from stocks and shares due to a fear of investing. Currently, a far higher proportion of men (25 per cent) invest into stocks and shares ISAs than women (12 per cent) but there is very little difference between genders when it comes to cash ISAs.