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Why taking care of your wealth is taking care of yourself

Date: 03 September 2020

Women are taking control of a greater proportion of wealth than ever before. Not only is it becoming more common for women to be the main breadwinner, they are increasingly responsible for household finances and savings.

In fact, women are poised to become an economic force. In a recent report by Boston Consulting Group, women are expected to increase their share of wealth by more than 7% each year by 2023. Here in the UK, a 2005 report from the Centre for Economics and Business Research predicted women will own 60% of the UK’s wealth by 2025. One reason for this is they are out-earning men in approximately a quarter of UK households now, compared to one in five households 16 years ago, research by the Office for National Statistics on behalf of Royal London shows.

This is not to say men are completely out of the picture. In fact, men generally have more stashed away in the form of investments and pension savings throughout their lifetimes. And even though all of the research suggests women will soon control most family wealth, the fact remains that most women have accumulated a smaller pension pot than men by the end of their working lives. At age 65, women are retiring with an average fund saved of £35,800, compared to an average £179,000 set aside by men, according to the Chartered Insurance Institute.

The reason for this is that women often do not invest as much or as regularly as men, and this puts their financial health at risk. Numerous studies have found that women are reluctant to invest their hard-earned wealth in the stock market. When asked why, they frequently cite a lack of confidence, a mistrust of the industry and a tendency to take less risk – or avoid it altogether by keeping savings in cash. So what can be done?

Taking care of others, not themselves

For starters, we know that different investment habits alone are not the only factor at play here. Financial inequality in the form of the pay gap and the ‘care penalty’ endured by women put them at a financial disadvantage throughout their lifetimes. The Quilter Women and Wealth Management Strategic Report published in 2019 found that a woman leaving work to take a maternity career break will see a significant impact on her earnings and pension pot.

Women take more time off than men for care-related breaks and, when they return to work, can expect to earn less. According to the Social Market Foundation, 10 years after the birth of their last child, working mothers earn 20% less than fathers.

All of these financial setbacks mean that you need to be able to grow your wealth, not just protect it. This is why investing your money confidently is so important. By investing, women can take control of their longer term finances, enabling financial parity.

What do we know?

Feeling empowered to increase your own and/or your family’s wealth can put you on the road to financial independence. It starts with debunking some of the myths about investing. But it is also about instilling women with the confidence that this is their domain too.

At Quilter Cheviot, we recognise that jargon and complex terminology get in the way of understanding the investing basics. We also know that women often view wealth differently from men.

The Quilter Women and Wealth Management Strategic Report found that women want wealth to have a positive impact and therefore are more interested in ethical or responsible investing. We also know that, overall, women tend to be more cautious investors than men.

Your go-to investment hub

This hub aims to equip women with a range of financial knowledge, giving you the confidence to take the first steps to investing, or to continue on your investment journey.

As well as knowing how to invest, we want women to be able to discuss their finances openly and comfortably with your partner and other family members.

The combination of lifestyle and educational articles address common issues and topics, including basic investing principles, the notion of risk versus return, inheritance and family finances, and aligning investments with your ethical values.

This hub has been designed for you:

  • whether you already have an investment manager and want to feel better informed to talk to them about your finances;
  • whether you have never invested and want to know more;
  • or you have become recently divorced or widowed and now need to make some difficult financial decisions.

At Quilter Cheviot, we are with you every step of the way.

Author

Rebecca Platt

Investment Manager

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