Women invest less than men in the UK when it comes to personal investments. In fact, the gender investment gap rose by £54 billion between January 2023 and January 2024, up to £567 billion, according to data from Boring Money. We spoke to Rachael Parland, a personal lifestyle coach from North Wales who also owns a car company, to find out what has stopped her from investing up until now.
Parland, 47, and her partner, John, have children aged 23, 14, 10 and six. They are keen to invest to help build up their long-term savings. Parland recently invested in two properties, which are currently being renovated. The aim is for the properties to generate income that can be used in retirement.
She is now keen to find out more about stock market investing, although it’s not something she’s ever done. “I’ve never looked into it before, because I thought property was easier. It’s something I understand more and my partner is a builder so he can help with the renovations,” says Parland. “But the changing rules around tax, inheritance and so on, mean I feel it’s maybe not as easy as it used to be.”
Parland would also like to retire in her early sixties and get her children on the property ladder. In the meantime, she wants to make sure she is not missing out on other opportunities to help her money grow.
“I want my family to live a nice life, and if opportunities arise we can go for them. I would like to hear more about investment options to make sure I’m not missing out on anything that could help my money grow more quickly and in a tax efficient way,” she says.
Parland wants to make sure she is not missing out on opportunities to help her money grow
Credit: Francesca Jones
Taking your first steps
For Parland, and anyone who wants to map out their long-term financial goals, the first step should be to do a full review of your finances, according to Tulip Horlington, a Lloyds financial expert. What is coming in and out of your accounts every month? What disposable income do you have? How much do you have in savings and how secure are you financially?
“We recommend everyone has a three-month buffer in accessible savings,” says Horlington. “Then try to understand your longer-term finances. What will your pension or property investment be worth in the future? Does this align with what you’re trying to achieve? And when will you need to access your money? The next step is considering the products you need to help you achieve your goals.”
“Some people are confident enough to do all of this on their own and can go straight on to find out about the products available. But if you aren’t sure or your situation is more complicated then it’s worth talking to an expert,” says Horlington.
Why don’t women invest?
Horlington says, in her experience, women tend to want to invest for their family as well as themselves. Women are more likely than men to see their money as the family’s money.
“It’s common for a woman to be in the mindset of having to put their children’s needs before her own. Investing or boosting their pension may take a back seat. I see it a lot when I talk to female clients and it’s all too familiar that they can’t afford it because they’re funding the childcare, have taken a break from work to care for children, or have worked part time and have not been able to build as big a pension or savings pot as they’d like,” she says.
Horlington adds that, as in Parland’s case, it’s very easy for people to choose property investing because it’s something they are familiar with: they’ve bought a house before and know what the process is and what they need to do.
If your financial goal is longer term, investing could be a better option than saving, says Tulip Horlington
Credit: Dunja Opalko
Getting more women investing
Horlington says it is also common for female clients not to feel confident when it comes to investing.
Lloyds research found that women are significantly less likely to invest than men. Just 44 per cent of women invest in the stock market compared with 65 per cent of men. Women only make up 23 per cent of investments in its higher-risk funds. This can be a problem, because it limits the potential of that money to grow more over the long term.
“If, like Parland, you have a longer-term goal, say five years or more, investing could be the better option for you rather than saving into cash accounts,” explains Horlington. “Investing regularly means you can make steady progress and take advantage of compounding as a way to help you grow your money. It’s important to understand that investments fluctuate so taking a long-term view gives you a chance to ride out any ups and downs. History shows that over the long run, money invested in the stock market will outperform interest earned in cash savings accounts. So if women continue to save in cash rather than invest, they’ll continue to fall behind their male counterparts.”
For Parland, Horlington suggests setting up a regular, monthly investment into a ready made investment fund.
“That lets her get into the habit without feeling overwhelmed with decisions to make,” says Horlington. She points clients to the ready-made investment options Lloyds offers, where you can start with £50 a month or a £500 lump sum.
“In Parland’s case, because she has quite ambitious goals, she may want to consider a higher monthly amount,” Horlington explains. “But you don’t need loads of money. Just £50 lets you get started, so anyone can do it.”
“Our ready-made investment options are designed to be simple to get you started,” says Horlington. “The only choice you need to make is, how much am I going to put in and then choose between three risk options. The word risk can be scary but it shouldn’t be the thing that stops you. It depends on what you’re trying to achieve, and how long you want to put that money away for. If you’re saving for a longer period of time, you might want to choose the higher risk option of the three, because your money has got more time to smooth out fluctuations and to eventually grow.”
Horlington says women need to make sure they are investing enough for themselves, as well as for their children
Credit: Dunja Opalko
Next steps
“Investment products are changing and it’s easier now to make choices,” says Horlington. “The Lloyds investments website has lots of help for beginner investors so you can get started.”
Horlington adds there’s around 6.8 million women already investing in the UK, according to data from Boring Money. “This is great news but it should be more, so women – like men – can make the most of the benefit it offers to help them achieve their longer-term goals.”
Lloyds Ready-Made Investments are available to Lloyds Internet Banking customers.
For more information search Lloyds Ways to Invest, where you can read more about their Ready-Made Investments and Stocks and Shares ISA.
The value of investments and the income from them can fall as well as rise, and you may get back less than you invest. Tax treatment depends on individual circumstances and may be subject to change in the future. Fees and charges apply.