Women are investing less than men – to our detriment. In just the UK alone, 29% of women reported trading stocks and shares online, in comparison to 47% of men. Another study found that 74% of women are too nervous to invest.

This culminates in a lot of money lost – research carried out in 2022 found that women are missing out on a massive £599 billion by not investing. The study found that UK men have almost £600 billion more than women in ISAs, investment accounts and private pensions.

So why is this? Well, like many gender gaps, it’s complicated. It’s best to begin with the structures that are holding women back. Maya Welford, a behavioural finance specialist for Barclays Bank, Private Bank & Wealth Management, who recently spoke at an AllBright Member breakfast on this topic, refers to the male-dominated nature and structure of the financial world, particularly the fact that the majority of financial advisors are male, as “a big reason why women feel less confident to invest”.

She refers to the long-term impact of women needing a man’s permission to open a bank account – which was only lifted as recently as 1975 – which has normalised continued exclusion from financial conversations.

Another part of the problem is differences between how men and women perceive risk, and therefore how confident they feel investing. According to research, men are more prone to take risks for personal financial gain than women – meaning they are more likely to reap the rewards from said risks, if women are less likely to take them at all. But that’s not the beginning and end of the problem.

“In the context of women, a lot of the research reports that women perceive activities like investing as more risky than men do,” Maya explains. “I prefer to take a different approach and instead suggest that women are more risk aware – they typically prefer to be aware of the risks and make decisions with all information available to them, rather than making a decision which may feel rushed.

“In the context of investing, the industry is full of jargon, which typically means that if you’re not used to the (often masculine) language used, it can also lead to women feeling like they don’t fully understand this space, which can then lead to them perceiving it as being more risky than it perhaps actually is.”

Words used like “alpha” and “beta” are part of a traditional narrative of masculine strength and competition, as are phrases like “beating the market” – this can often make women feel out of the loop, especially when conversations around investing are had in traditionally male-dominated spaces, such as golf courses and board rooms.

There are ways to navigate the way we perceive risk. Finance coach Ellie Austin-Williams suggests reframing the way we think about investment risk, considering the risk that is posed by not investing, “which is that the buying power of your money will be eaten away by inflation”. “Risk is often an opportunity for reward,” she adds.

When it comes to other ways to ensure that future generations of women feel more confident in investing, Maya says that “education and setting social norms from an early age can be a really powerful way to create societal change”. If young women were to grow up understanding the ins and outs of investment, many of the barriers that threaten to hold them back later in life may be less of a problem.

She adds: “By improving financial literacy education during childhood and making investing feel more normal and familiar across children of all genders should have positive longer term impacts on closing the gender investment gap.”

Of course, there are myriad ways for adult women to reclaim their confidence in investing, also. Ellie advises women to “[make] a point of talking about investing and money more generally with your friends and social networks”.

While the subject of money can feel taboo in social situations, unpicking our discomfort can be a great way to move forward. “You’ll not only learn from each other but build your confidence, the more you chat about finance and demystify it,” Ellie says.

Maya echoes this notion, stressing that community is key. “Creating the spaces to learn, ask questions and discuss investing has the potential to narrow the gender investment gap,” she says, adding that educating yourself in finance and investment as an adult can be a game changer in navigating imposter syndrome in that area.

The male-dominated structure and language of investment can feel overwhelming, but there are plenty of ways to tackle this. Ellie suggests finding your preferred learning method and platform, whether that’s books, podcasts or taught classes. “Finding a learning style that works for you is especially important for women, given that the investing world has been designed by and for men,” she says. “Look for resources for women in particular, and communities such as Girls That Invest or Female Invest that aim to empower women to invest confidently.”

She adds that investing, like many other things, is absolutely a skill that can be learned. “It doesn’t have to be complicated,” she says, suggesting starting small and building up.

“A successful investor doesn’t have to spend hours and hours each day or month investing, she says. “It’s about knowing the basics and then getting started. Nowadays you can start with £1 on some platforms too, so you don’t have to jump in with hundreds.”

So while we may not be able to tackle structures of inequality overnight, we can reframe how we approach investing – and build our potential (and bank account balances) from there.

Disclaimer

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