Women are earning, creating, inheriting and managing more wealth than ever before, St James’s Place report reveals

According to a new St James’s Place (SJP) report, women are earning, creating, inheriting and managing more wealth than ever before, but the research also reveals that this development is not matched with increased confidence or engagement with long-term financial decisions.

The report finds that women are comfortable to take the lead with day-to-day household finances (46 per cent), but less so than men when it comes to managing long-term finances, relating to choosing savings providers, investing, retirement planning and estate planning.

Women are less likely than men to take financial advice: just a quarter (25 per cent) have had financial advice in the past 10 years compared to 31 per cent of men. Women are also less likely to invest (27 per cent in comparison with 43 per cent). A higher number (24 per cent) of women are struggling financially than men (18 per cent).  

The research indicated a potentially positive shift, however, finding that among younger women, four in 10 of those aged between 18 to 34 do have a financial plan, and that more are investing.

Ability to plan and save is affected when women take time out of the workplace. Almost a fifth (19 per cent) say they feel less financially secure as a result of taking a career break.  More than half of women (56 per cent) have taken a step away from the workplace, in comparison with 38 per cent of men.

Giving an example of the impact this could have, the report referred to a potential ‘pension cost’ of more than £30,000, resulting from a five-year career break at age 30. To make up the shortfall, a woman would have to invest almost a tenth (9.7 per cent) of future earnings into a pension.

Furthermore, it emerged from the study that many couples have not prepared for significant life events. More than a third (38 per cent) had not had a conversation about what would happen in such circumstances.  

Almost four in 10 couples (38%) had not discussed what would take place in the event of illness, separation or death or a partner, or couldn’t remember if they had. Only a fifth (20 per cent) said they had discussed these matters in detail. However, more than three quarters (78 per cent) of women taking financial advice on an ongoing basis said they had talked through the potential outcomes. 

The report also noted that among women who were receiving ongoing financial advice, confidence levels around finance were much higher: 74 per cent of this group were confident about taking investment decisions, compared to 41 per cent of women not receiving advice.

More than eight in 10 women (82 per cent) who receive advice said they would be confident managing a significant inheritance. Only 52 per cent of women not receiving advice could say the same.

Claire Trott, head of advice at SJP said: “Our research reveals where women receive financial advice, confidence levels can be significantly boosted and therefore engagement is increased.

“This shows the value of advice and talking financial plans through with an adviser. It can help women to clarify their financial goals and achieve the reassurance and support needed to move forward confidently.”

www.sjp.co.uk 

Pictured: Claire Trott