ISA gender gap: Two thirds of stocks and shares ISAs held by men
Two thirds of people who hold a stocks and shares ISA are men, while women are more likely to keep money in a cash ISA, new research from Hargreaves Lansdown has found.
Figures from HMRC, cited by the fund supermarket, showed that while women hold 52 per cent of all ISAs, 1.57 million men took out a stocks and shares ISA in 2019/20 compared to just 1.16 million women.
According to HMRC, women had an average of £1,991 less in their ISAs than men in the 2019/20 tax year.
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“There’s a stark gender ISA gap, with men far more likely to hold stocks and shares ISAs than women,” said Sarah Coles, head of personal finance at Hargreaves Lansdown. “It means that despite women holding more ISAs overall, because they’re focused on cash, men stand a better chance of beating inflation over the long term.
“Where women overcome the barriers to investing, however, HL data shows that they adopt sensible, long-term investment strategies, and hold more than men.
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“Women’s reluctance to invest owes a great deal to the fact that on average they earn less than men,” Coles added. “And the more you earn, the more likely you are to have an investment ISA. It tends to reach a tipping point when our income reaches £30,000: before then we’re more likely to have a cash ISA, and after that we’re more likely to favour stocks and shares.”
But Coles also said the figures show there are reasons for optimism.
“There is real hope, because women who invest are building impressive investment portfolios,” she said. “Among Hargreaves Lansdown ISA clients, women who have taken the plunge and invested in ISAs hold more on average in them than men. Women hold an average of £54,615 and men an average of £52,203.
“They’re also likely to have adopted a sensible get-rich-slow strategy, holding around three-quarters of their ISA assets in funds – while men hold closer to two-thirds. Funds are less likely to shoot the lights out than individual shares in any given year, but by spreading the risk over a number of different investments, they help diversify the risk.”
Another option for savvy individuals is the Innovative Finance ISA, which offers tax-free earnings from peer-to-peer investments. Several P2P lending platforms are currently advertising target returns of nine per cent or more.