- New research by AJ Bell Money Matters suggests the gap between men’s and women’s ISA wealth begins at age 21
- The peak decade for the gap is the 30-39 age bracket, typically coinciding with motherhood and career breaks, when women have 46% less than men in ISAs on the AJ Bell investment platform
- Over a million more women subscribe to Cash ISAs than men, according to the latest figures from HMRC*
- The gender ISA gap stands at £6.6 billion, according to HMRC data**
- Key barriers preventing women from investing are lack of knowledge, fear of loss, choice paralysis and trust issues with the financial sector…
- …but those that do invest are often outpacing their male counterparts in terms of Stocks and Shares ISA subscriptions
- AJ Bell Money Matters shares how individuals, the financial sector and policymakers can close the gap
Baroness Helena Morrissey, founding ambassador of AJ Bell Money Matters, comments:
“It’s unfortunately no surprise that the gender ISA gap exists. Cash ISAs are considered a safe haven by women in the UK, potentially protecting wealth during market downturns but with pitiful growth in the long term compared with the average returns seen from investing.
“Encouragingly, when women do invest, they are strategic, engaged, and even outpace men in average Stocks and Shares ISA subscriptions each month on the AJ Bell platform. The challenge is to ensure more women take that first step toward investing.
“Our research shows that investment behavior plays a key role, with men tending to take more risks, leading to higher returns in strong markets, while women often adopt more cautious strategies, such as sticking to Cash ISAs and investing in lower risk funds. Combined with the gender pay gap and career interruptions, these factors contribute to a significant wealth disparity that continues into later life.
“Through AJ Bell Money Matters, we’re calling for individuals, financial services firms and policymakers to take steps to close the gender ISA gap. Our latest report details how tackling this issue together could unlock billions in potential wealth for women across the UK and increase investment in markets.”
When and why the gap starts
- The average man with an ISA holds £3,000 more than a woman with an ISA, for Cash and Stocks and Shares ISAs combined – it means women hold on average 10% less in their ISAs than men, according to HMRC data (see table below)*
- This is despite the fact that ISAs are more popular among women, with 10.7 million ISAs held by men and 11.5 million held by women
- On the AJ Bell platform, women paid in higher average Stocks and Shares ISA contributions every single month in 2024
- Between the ages of 13 to 28, women on average have slightly higher Stocks and Shares ISA balances on the platform
- Despite this, the gender ISA gap begins at 21 and is at its widest for people in their thirties when men open and fund accounts in higher numbers than women
Women start off their financial lives with healthy Stocks and Shares ISA contributions and slightly higher average balances than their male counterparts. But the gap between the amount that men and women have in Stocks and Shares ISAs on the AJ Bell platform reaches 46% when people are in their thirties, coinciding with the most common age for women to have children in the UK. Career breaks, part-time work and added financial pressures often result in fewer women investing, while men’s wealth accelerates through years of compounded growth.
*Source: HMRC Annual savings statistics 2024.
**Based on HMRC Annual savings statistics 2024 for average total ISA value, multiplied by total ISA holders, for men and women.
The gender ISA gap
Source: HMRC/AJ Bell. Average ISA values by age/gender, including all types of ISA.
Men and women invest differently
- The barriers preventing women from starting to invest are lack of knowledge, fear of making mistakes, choice paralysis and trust issues with financial services
- Women are far more likely to say they feel nervous about investing than men
- Men are more active traders than women, making an average of 12 trades per year compared to nine respectively
- Global markets are favoured by women whereas men prefer UK markets
- Men are more optimistic about markets than women
Before women even open accounts, they are hesitant about their finances and more so about investing. Despite life milestones and external triggers pushing women to consider investing, there are still several barriers preventing the first step. Although lack of confidence and fear of making mistakes are well documented, choice paralysis (of both platforms and investments) and mistrust of the financial services industry are wider hurdles the industry and policymakers need to address.
When women are investing, they’re placing fewer deals meaning they are potentially saving on investing fees. But they are more pessimistic on markets, expecting stock markets to remain flat in 2025. On the other hand, men are more optimistic and expect the stock market to rise by up to 10% this year*.
*Source: AJ Bell customer survey of 1,530 individuals carried out online between 2-6 December 2024.
Laura Suter, director of personal finance at AJ Bell, comments:
“It’s understandable that people think investing is scary – it can feel like a daunting world to enter. But all too often we let perfection be the enemy of progress – you don’t need to be an investing guru with a huge stash of wealth to get started. On many platforms you can start from just £25 a month and build up from there, as you get more experience and comfortable with investing.
“Sticking to cash is a smart move for any money you don’t want to take risk with or you know you need to spend in the next few years, but it’s a terrible place for long-term wealth. Our own data shows that if you had saved £1,000 a year into Cash ISAs since they were launched in 1999 and earned the average Cash ISA interest rate, you’d have a pot worth £34,400. But this would have failed to keep up with inflation, meaning your spending power would have been eroded. In real terms you’d have been worse off. If instead you’d invested in the average return of a fund investing in global markets, you’d have a pot worth £83,600 after that same period – almost £50,000 more*.
“These figures highlight exactly how women are harming their future wealth by not embracing investing. But it’s not just down to individual action. There is much more both the financial services industry and policymakers can do to encourage this group to start investing. At a time when the government is looking for ways to boost investment in the UK and encourage people to shift from cash, this is a clear win for all.”
*Figures based on £1,000 investment each April into the average Cash ISA interest rate, based on Bank of England data, compared to investing in the average return of funds in the IA Global sector, based on figures from FE.
How to close the gender ISA gap
- For individuals
Many women hesitate due to perceived risk or complexity, but starting small can build both wealth and experience over time.
Stocks and Shares ISAs generally outperform Cash ISAs in the long run. You can start investing from as little as £25 a month and investing gradually can increase confidence as well as long-term savings. Platforms like AJ Bell Dodl provide easy-to-understand guidance and 4.58% interest on cash held in its Stocks and Shares ISA, helping beginners to grow their money while they learn to invest.
- For the financial services industry
The industry can play a key role in closing the gender investment gap by offering better support and education. While investing is no longer a ‘boys’ club,’ more can be done to make it welcoming for women and beginners alike.
Simplifying investment choices can help combat choice paralysis – whether through a streamlined range, better tools, or a clearer customer journey.
Most importantly, ditch the jargon. At AJ Bell Money Matters, we believe in plain English, not confusing acronyms. By making investing more accessible, we can empower more women to take control of their financial futures.
- For policymakers
Systemic change is needed to make investing more accessible. With multiple ISA types, it’s no surprise many people feel overwhelmed. Simplifying ISAs would encourage more participation, especially among women. AJ Bell advocates for a unified ‘One ISA,’ merging the best features of existing ISAs to make saving and investing easier.
Better support and guidance are also crucial, as not everyone can access regulated financial advice. The FCA and Treasury’s plans for targeted support are a step in the right direction.
About AJ Bell Money Matters:
The AJ Bell Money Matters campaign was launched in 2021 by Baroness Helena Morrissey, founding ambassador of Money Matters and founder of the 30% Club, alongside an all-female team from AJ Bell – including director of personal finance, Laura Suter; head of financial analysis, Danni Hewson; head of strategic planning and governance, Emma Keywood; and head of campaigns, Jenny Putley.
AJ Bell Money Matters exists to encourage more women to engage with their finances and feel good, investing. The team has campaigned for inclusivity with podcasts, articles, events, partnerships and dedicated social media channels all designed to help promote inclusivity when it comes to investing. Find out more here: www.ajbellmoneymatters.co.uk