New year, new budget? If your new year’s resolution involves taking your finances more seriously, this is the year to do it. We’re in the throes of a massive general wealth transfer. “Women are controlling more and more global wealth,” said Ida Liu, the global head of Citi Private Bank. “In the next five years, $30 trillion is going to pass in the hands of women, and they’re going to control over 50% of the global wealth market.”

Money can feel like a taboo subject, but in order for women to feel fully financially empowered, it’s crucial to bring money talk into the light. That’s why we’re getting real about the savings gap – here’s what you should know.

What is the gender savings gap?

A recent Women and Wealth report by Schroders Personal Wealth found that nearly twice as many women (29%) save less than £100 each month versus 15% of men and only 17% of women feel confident about achieving their long-term financial goals compared to 29% of men.

That means women are financially disadvantaged when it comes to earnings, pensions, inheritance and investments, leading to a gender gap that leaves women financially disadvantaged at every stage of their lives.

“The gender savings gap refers to the difference between men and women when it comes to the amount of money saved or invested,” Katie Nutting, financial planning director at Schroders, tells AllBright. “This gap spans across cash savings, investments, and pensions, and can have significant long-term financial consequences for women.”

There are a few key drivers behind the gender savings gap – the most obvious is the gender pay gap, which leaves women less disposable income to save or invest. Women are also more likely to take a career break for caring responsibilities and raising children leading to less income and pension contributions, and women’s employment prospects plummet and never return to their previous pre-child level, known as the motherhood penalty.

Plus, women are less likely to invest in stocks and shares, preferring cash savings instead. Only 26% of women hold a Stocks and Shares ISA compared to 45% of men, the report found.

“Holding more cash may feel safer, but over time, cash typically loses value due to inflation. Meanwhile, although they do come with risks, investments have the potential to grow and compound, which can help create significant long-term wealth,” Nutting said.

What the gender savings gap means for women’s financial freedom

The savings gap actively inhibits women from being financially empowered and able to make choices for their own life.

“From my experience, being in control of my finances gave me the freedom to leave an unhealthy relationship and pursue a career aligned with my passions rather than one dictated by necessity,” Dr Heloïse Greeff, popular investor at eToro tells AllBright.

The implications of the gender savings and pension gap are far reaching and impact women throughout their careers and well into retirement – and even generationally.

“This has implications for financial resilience, meaning less power around making life’s important decisions,” Lisa Picardo, UK chief business officer at PensionBee tells AllBright.

“Financial empowerment is about having the knowledge, resources and confidence to address the financial challenges head-on. It's not just about managing everyday expenses; it’s about gaining the freedom to plan for the future and even to dream big,” she added.

What will it take to close the gender savings gap?

It won’t be quick or easy to bridge the savings gap, but it’ll be well worthwhile.

“Closing the gender savings gap could help women retire with more confidence, choice and better retirement outcomes. But this requires structural changes that address the root causes of financial inequality across society, on the part of employers and at an individual level,” said Picardo.

“It’s about empowering women to experience true choice and autonomy in their personal and professional lives,” Greeff added.

How to boost your monthly savings

To improve your own financial wellness, the experts shared their tips to increase your monthly savings

1. Make a financial plan.

Take time to understand your income and expenses, and identify any surplus that can be set aside for longer-term investments. A financial adviser can help you map out your goals and review your plan regularly.

2. Pay yourself first. Always.

This shows intent and dedication to your financial journey. It’s a powerful habit to cultivate early on. 

3. Make the most of tax allowances.

Use tax-efficient wrappers like ISAs and pensions to maximise your savings.

4. Know your worth and negotiate your salary.

The more you earn, the more you are likely to be able to save and invest. Take time to research salary benchmarks for your role, skills, and industry. Go into salary reviews prepared to negotiate based on your market value. Confidence is key — don’t undersell yourself.

5. Increase your pension contributions by just 1% and maximise employer pension contributions.

Even a small increase can make a difference over time and the power of compound interest means the earlier and more you save, the more your money will grow. While employers are required to pay a minimum of 3% into your workplace pension, some may be willing to pay more or even offer matched contributions.

6. Automate your savings through roundup or standing orders.

Most digital banking apps now offer some form of automatic saving features that round up your everyday purchases to the nearest whole amount. This allows you to funnel any spare change into a savings account without having to take any additional actions.

7. Invest what funds you won’t need for five years.

Investing isn’t all-or-nothing – You can choose investment options that match your risk comfort level and time horizons. Generally, longer time frames allow for higher risk investments, as you have more time to potentially ride out market fluctuations.

Even taking small steps towards your own financial future will have an impact on narrowing the savings gap, as well as empower more women to experience financial independence. 

“Closing the gender savings gap would enable women to have the same financial opportunities, security and independence as men, creating a more equitable future for all,” Picardo said.

Disclaimer: When investing your capital is at risk.

Disclaimer

AllBright cannot guarantee that all of the information provided in this video or article is accurate. Use the information provided on our website at your own risk. If you wish to make an investment you should seek independent financial advice before doing so, and ensure that you have carried out your own research on the product or company that you are investing in. Any advice provided is not tailored to anyone’s individual situation, as each individual is in a different situation. AllBright does not accept any liability whatsoever for any action taken or losses incurred as a result of the information provided on our site.