Is the future of wealth female?

All information is correct as at 30 April 2023 unless otherwise stated.

Women are set to own 60% of the UK’s wealth by 2025. It’s a trend that’s likely to continue over the next decade or so, despite all the penalties women face.

Women still get paid less than men. Despite a blaze of publicity around the gender pay gap and companies promising to address the inequality, the gap is still exactly where it was five years ago at 9.4%.

Women are more likely to take career breaks to raise a family (up pops the ‘motherhood penalty’) or to care for a sick or elderly relative (hello ‘good daughter penalty’). This can hinder women’s careers, their pay packets, and their pensions.

More recently, the ‘COVID-19 penalty’ had a massive impact on women’s careers and their financial resilience, as they shouldered more of the burden of lockdowns, illness and school closures.

Yet women have more financial power than ever before and are a force to be reckoned with.

The great wealth transfer

In just a few years’ time women will be controlling the lion’s share of wealth. And that’s not just in the UK. It’s a global phenomenon happening across Asia and the US too.

Some of this is simply down to longevity. We know women tend to live longer than men. Older women are often single, separated, divorced or widowed (four in ten over 55s fall into this category).

They might have inherited money from their partners, acquired assets in a divorce settlement, or have built their own wealth. Inheritance is another major part of the wealth transfer. Women are likely to be the biggest beneficiaries of the wealth being passed down from the baby boomer generation.

Female representation is growing

Female-founded start-ups are on the rise, with female entrepreneurs building more new businesses last year than ever before. In 2022, women in the UK established over 150,000 companies – more than twice as many as in 2018.

Women sitting on boards is also on the up. 40% of FTSE 350 board members are female, compared to just 9.5% in 2011.

A change for all

It’s not just the rich or well-off who will benefit. Women across all wealth brackets are set to inherit 70% of global wealth over the next two generations.

Does this mean we’ll see an army of female investors emerging? Well, the shift is already happening and we’re excited about the future.

Women who invest are already building impressive investment portfolios. Those who have taken the opportunity to set up a Stocks and Shares ISA with HL hold more on average in them than men.

Women are focusing more on getting their money working harder by investing. And guess what? Nothing bad happens when women have more money. It’s a game changer – for the family, society and the economy.