The Gender ISA Gap in the UK: A Closer Look
The gender ISA gap in the United Kingdom has reached a staggering £6.6 billion, with women holding an average of £3,000 less than their male counterparts, as revealed by research conducted by the investment platform AJ Bell. This gap emerges in early adulthood but becomes particularly pronounced in the 30-39 age group, where women possess 46% less in their ISAs compared to men.
One of the primary reasons for this disparity is the tendency of women to prefer cash ISAs, which typically offer lower long-term growth compared to stocks and shares ISAs. The findings from AJ Bell’s research highlight that over a million more women hold cash ISAs than men; however, men dominate the stocks and shares ISA space, boasting nearly 500,000 more accounts than women.
During a recent AJ Bell Money Matters event held at the House of Lords, Baroness Helena Morrissey emphasized the cautious nature of female investors. Women often gravitate towards low-risk funds or cash ISAs, while men are more inclined to explore riskier investment opportunities that can yield higher returns during favorable market conditions. She remarked, “When it comes to women’s financial independence, investing plays a critical role. Yet, despite the growing awareness of the importance of investing, there remains a stark gap between men and women when it comes to stocks and shares ISAs.”
Baroness Morrissey further noted, “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.”
The report also indicated that women on the AJ Bell platform are making greater average contributions to stocks and shares ISAs in 2024, especially among those aged 13 to 28. However, this initial enthusiasm often wanes in later years, as men continue to open and fund stocks and shares ISAs at higher rates, while women tend to stick with cash ISAs, which generally offer lower growth potential over time.
Laura Suter, the director of personal finance at AJ Bell, mentioned that cash ISAs are not inherently a poor option; however, there are notable long-term disadvantages to relying solely on them. Previous studies have shown that investors could significantly boost their savings by choosing stocks and shares ISAs over cash ISAs, even though there is always a risk of losing money.
AJ Bell’s research also revealed that women are generally more pessimistic about market performance, often anticipating flat or minimal returns in 2025, while men tend to exhibit more optimism. This reflects a broader trend of women feeling less confident about investing, despite the fact that when they do invest, their choices are often more thoughtful and strategic.
To address the gender ISA gap, the report advocates for enhanced targeted support, improved financial education, and the simplification of investment options. Baroness Morrissey called for a more accessible, jargon-free investment environment to facilitate women’s entry into the market. She stated, “Financial services must do more to make investing accessible, intuitive, and jargon-free. Policymakers must simplify ISA structures and allow the industry to provide new investors with more support.”
