It’s been 20 years since Scottish Widow’s produced its original retirement report highlighting the gap in women’s pension value and whilst things have improved marginally, women will still have a 30% gender gap on retirement income, meaning over 2.2m women working in the UK today will retire into poverty.
Starcount x The Female Lead wanted to join forces to address this problem.
Many of the contributing factors in the 30% gender retirement gap include the impact of maternity leave and childcare costs, consequently resulting in women having to take career breaks or part-time work which vastly impacts pensions and accumulated salary and savings. However, a major factor is also the lack of women investing versus men.
This is something we could help address today.
The investment landscape remains deeply uneven, particularly for young women. Only 34% of women aged between 18-24 say they invest outside of pensions, compared to 64% of men of the same age, which presents a major concern given the value that saving early and compound growth can bring.
If more women invested as part of their savings approach, then more would be on track for better retirement outcomes. Investing more when young can also be a way for women to offset the impact of potential career breaks on their investment pots.
Starcount’s recent study shows that investment rates among young individuals are low but growing, with only a small percentage beginning to invest by key milestones in their financial journeys. Starcount data shows those aged 18-24 are using Smart savings platforms, New-Gen Trading platforms and Crypto Exchange. This suggests that young investors prioritise a mix of innovative and safe strategies while grappling with constraints like lower disposable incomes or shifting financial goals.
Women’s Financial Priorities Across Life Stages
Whilst the use of investment platforms is growing among young people, this study from The Female Lead highlights significant gender disparities in attitudes towards money that begin early and compound over time. Women’s financial priorities evolve with their age and circumstances:
Source: The Female Lead’s Fulfilment Finder survey of 151,000 + women.
- Young: We know many women in this bracket are in the early stages of their careers and so are balancing being low income with managing their current expenditure
- Mid-life: Women in this bracket prioritise resilience and stability, they are focusing on securing their futures while managing diverse household responsibilities.
- Later life: The emphasis shifts to managing long-term savings and retirement plans, which is great but too late (and much later than for men.)
WHY is this happening? There’s no doubt that women are considering investment too late in their lives.
We wanted to encourage more women to invest in their earlier years (much like their male counterparts) so the financial gap later on in life is not as significant.
To achieve this, we segmented 18-30 year old women in the Starcount data sources to understand what they love and care about and where they spend their time and money with the aim to understand the messaging and nudges needed to encourage them to invest.
By uncovering WHY they spend their money, we can start to build a better picture of how to target them with investment messaging that will resonate and change their financial habits.
We uncovered 3 segment groups. Although all part of the same life stage they exhibit different spending habits and financial focuses:
- Resilient and single mums: are less likely to have a great amount of disposable income due to sole caring responsibilities. They often focus on immediate financial needs and how they can make their money work for them on a budget – which is evident from their spending behaviour.
Low income & fun: aren’t earning much but anything they do earn is being directed towards entertainment and socialising, they enjoy having fun and probably have more of a ‘treat-yourself’ mindset, rather than prioritising saving. This is shown by where they spend their time and money.
Educated & comfortable: are likely to have higher paid jobs because they are educated to a degree level and have probably started saving for their home and health – but don’t talk about money that much and so find investing daunting.
With this insight, how would you target each group?
By understanding their current priorities and spend behaviour from Starcount’s data, we can understand what will nudge and encourage these young women to invest.
Resilient single mums: ‘When saving for the future – even a small amount can make a big difference.’
Low income and fun: ‘Life is for living, but your future deserves attention too.’
Educated & comfortable: ‘Turn your dreams into a plan – start building the foundation for your future today.’
The Female Lead was able to use this insight to tailor messaging for women based on their current situation.
And at Starcount, we know where to reach these women and how many there are across the UK so the campaign can be targeted to create the ultimate impact.
Through this, we got hundreds of thousands of women engaging with investment as a conversation topic, and encouraged more of them to act.
The Future of Female Investing
It’s time to shift the narrative and empower women to take control of their financial futures. Closing the investment gap is about more than raising awareness but also needs action. This means developing tailored education programs, developing tailored campaigns and promoting a culture that empowers young women to see investing as a vital tool for independence and security.
