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4 ways to realise the power of women’s money

From investment barriers, gender gaps and advice misconceptions, we look at the 4 ways women can embrace and release their financial power.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

This article is more than 6 months old

It was correct at the time of publishing. Our views and any references to tax, investment and pension rules may have changed since then.

From investment barriers, gender gaps and financial advice misconceptions, here are four ways women can embrace and release their financial power.

This article isn’t personal advice. If you’re not sure if an action is right for you, ask for financial advice.

1. Removing investment barriers

Many women might not consider themselves investors.

But what if we told you, you are?

If you’re enrolled into your workplace pension, you’re already investing in the stock market.

What’s more is that women are just as confident and comfortable as men when it comes to saving. Women also aren’t scared off by Individual Savings Accounts (ISAs) – in fact we found that women have more ISAs than men.

But what about the type of ISA?

Although women tend to hold more in cash, latest government figures (from the 2017/2018 tax year) show that number is falling. Suggesting that women are becoming more confident with investing in the stock market.

When it comes to investing, some women might say that it’s the risk of loss that stops them from investing in Stocks and Shares ISAs and so they’ll opt for the safer cash instead.

Cash is great for your emergency fund that you need to get to quickly to cover any unexpected expenses. It’s normally a good idea to hold 3-6 months’ worth of expenses, and 1-3 years if you’re retired. But by just holding cash, over and above your emergency fund, you could be missing out on significant future gains. With interest rates as low as they currently are, your money held in cash won’t earn you much at all in the long term.

So how do we become stronger investors?

Sometimes, the hardest part is the fear of the unknown and also, let’s face it, the fear of losing your money. If you’re a younger investor (40 and below) and want to start investing, a good place to start is with a long-term plan. Investing with a long-term view means your money has a better chance to recover from any stock market falls, and hopefully rise over time.

It can be helpful to sense-check your goals. Ask yourself what you want to save for and how long you need your money to stay invested to help make you the most returns. Whether that’s a career break, to go travelling, buying your first or even your second home, it helps to have a clear goal in mind.

If you‘re closer to retirement and worried about the risk of loss to your savings, you could seek financial advice. Financial advice can help you to plan how to maximise your retirement investments and income.

2. Boarding up the gender gaps?

We know that there are gender gaps. We’re reminded of them constantly. But we’re not normally told what we can do to overcome them. Instead we’re peppered with how bad it will be for us over our lifetimes.

So what about the pension gap?

It’s estimated a five-year career break could cost a woman £100,000 in pension money by the time she retired. But if a woman in her 30s with an average UK salary paid an extra 8% into her workplace pension (13% total from her contributions, plus 3% from her employer equalling 16% in total), she could close that £100,000 pension gap by the time she retired. Remember money in a pension can’t normally be taken out until 55 (57 from 2028), when up to 25% is usually tax free with the rest taxable.

Try our pension calculator for yourself

What’s more is if you’re under 75 and you’re a UK resident, you’ll automatically receive a 20% government tax relief boost on your contributions. Higher rate and additional rate taxpayers could get this and more. Tax rules can change and the value of any benefits depend on your circumstances.

Learn more about tax relief

3. Busting myths about financial advice

There are three common misconceptions about financial advice:

  1. It’s only for people who are very wealthy
  2. I’m too young to take financial advice
  3. It only exists to make the adviser money and it’s too expensive

But those simply aren’t true.

There’s no reason you can’t have a specialist who’s dedicated to helping you plan your investments. In the same way you might pay an osteopath to fix any aches and pains you have.

Financial advice is for everyone. No matter your age. Or whether you have a small or large amount to invest. It can be flexible.

If you’re worried about the cost of advice, we make our charges obvious and easy to understand. You can expect to pay around 1 to 2%, and given markets can fluctuate by that much in a day, it can be a small price to pay for peace of mind.

More on the cost of financial advice

If you’ve been thinking about taking advice, but you’re not sure if it’s right for you, you can contact our advisory helpdesk. They can explain how advice works, what the charges are, and put you in touch with a financial adviser if you decide it’s right for you.

Book a call

4. Keeping the conversation going

Would you be surprised to know that we’re more comfortable talking about our dating lives to our friends than we are about our money? From how much we earn, to how much we spend, to how much we save. We keep our cards close to our chest.

It’s easy to say that a problem shared is a problem halved, but most of us find talking about money more taboo than our relationships and actually we don’t realise it’s a problem at all.

Money truly is our last taboo.

So how do we fix it?

There‘s no magic potion, but by being more open with the loved ones in our lives, we can keep the conversation alive.

We don’t have to talk about the exact numbers in our bank account, or our savings account. But we can talk about investing, about whether we take advice or not, about how we’re growing our money.

By continuing the conversation, we’ll help remove some of the misconceptions about money.

We won’t tell you how to save your money, or how to spend it. It’s not our business. Our business is to support, empower and encourage you to save and invest with confidence.

You never know, you might thank yourself later.

Women's Week 2021

To mark International Women’s Day, we’re hosting a Women’s Week (8-12 March 2021) focusing on financial security.

We've brought together industry experts and personal finance bloggers to talk all things money, with easy to watch videos to help women challenge their finances.

Check out our financial Women's Week 2021


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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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