Women far smarter than men when it comes to everyday finances says new study

3rd March 2016

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Women are far savvier than men when it comes to their everyday finances, new research from BlackRock’s has concluded.

The asset manager’s Investor Pulse survey found that nearly half of women, at 47%, treat saving money as a financial priority compared with 42% of men.

They are also more likely to be concerned with day to day financial risks, such as the high cost of living – at 59% compared with 48% of men and price rises or inflation, with 37% versus 33% of men.

In addition, 30% of women put paying off credit cards or other debts high up on the financial to do list, compared with just 26% of men.

While working men and women hold an equal amount of debt as a proportion of their salary, at 22%, men are more likely to turn to instant, quick fix loans.

Outside of a mortgage, women have on average £5,000 of debt versus men who have £8,000.

More women have a student loan, at 11% versus 9%, whereas men are more likely to have a bank loan at 18% against 13% of women.

Women are also less likely than men to turn to payday loans; only 4% of millennial women have a payday loan, compared with 10% of men.

Rise of the independent millennial woman

Women aged 25-34 years prioritise getting a foot on the property ladder far more than men of this age. Some 38% of millennial women already have a mortgage, compared with just 31% of millennial men.

Perhaps as a result, 35% of women in this age group are concerned by housing or real estate costs while only 26% of men are.

Retirement requirements

Notably the study found women want less when it comes to income in retirement.

On average, they desire an annual household income of £22,000, versus £25,000 a year wanted by men. Women want less across all age groups and this is particularly prevalent among 35-44 year olds.

Women in this group say that they would like £23,000 annually in retirement yet men of the same age want an additional £4,000 per year. However, both men and women fail to understand the retirement pot they need to grow to meet their retirement income expectations.

Not including the state pension, men underestimate the pot they will need by £268,000 while women underestimate their pot by £275,000, according to the analysis.

The confidence conundrum

Despite women wanting less when it comes to their retirement income, men across all age groups are more confident about achieving it.

The majority of both men and women having started saving for retirement (64% and 56%), more than half of men, at 60%, are confident they will meet their retirement income expectations, while only 41% of women are.

The contrast is more prevalent among millennials and those aged 35-44.  Almost seven in 10 millennial men are confident they’ll reach the annual income they want compared to just 45% of women. While 59% of 35-44 year old men are confident, just 38% of women are.

This lack of confidence is clear in other areas of personal finance too, with men typically more self-assured when it comes to investing. More than half of men, at 53%, are comfortable making their own investment decisions, whereas only 38% of women are.

Furthermore half of men, at 49% feel in control of their financial future compared to just 39% of women. And, while 36% of men feel knowledgeable about investing, only 19% of women do.

This lack of confidence may translate into investment decisions, with 73% of women holding almost three quarters of their savings and investments, outside of a pension, in cash, while men allocate 60% to cash.

Claire Finn, head of DC investments at BlackRock, said: “Women are savvy when it comes to managing money in their pocket and have a better grasp of the risks that could de-rail them financially. This approach has meant that those in their twenties and thirties have prioritised buying a property compared to their male counterparts.

“However, women lack confidence in investing. Just three in 10 women think investing is for them yet when shown the returns of equities versus cash over ten years, almost seven in 10 women would want some equity exposure.”

“Whilst women may want less income in retirement than men, they’re less confident in achieving it.

“Saving regularly for retirement could not only help women feel more confident about their financial future, it might also mean they reach their goals sooner.”

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