Women need to catch up in financial planning

Despite worrying about their financial future, few women concern themselves with questions of long-term financial planning. This was the finding of the UBS Women’s Wealth Study 2021Click here to access the UBS Women’s Wealth Study 2021. Only one in five women said they were seriously engaged with the topic of accumulating wealth, this despite the fact that 57% of the 18- to 34-year-old women surveyed believe they should be more involved with investing and financial products. The study also shows that only around half of the women surveyed make long-term financial decisions together with their partner, though 87% are convinced that this topic should be tackled jointly.  

Where does this discrepancy between knowing how important it is to make long-term investments and acting on this knowledge arise? Will younger women make the same mistake as the previous generation by neglecting this issue? Both younger and older women believe they know less than men about financial investments and products. This belief is even stronger among younger women (48 percent) than older. The younger generation also more frequently cites a lack of interest and time for financial issues as the reason why they do not know more.

A study by SotomoClick here to read Zurich’s “Women and retirement planning” study (content in German) in 2022 on behalf of Zurich Switzerland and the Verein Geschlechtergerechter (Gender Equality Association) confirms that a perceived lack of expertise is a factor inhibiting women from more active investing. Women are often also more risk-averse than men. Out of a fear of losing money, they prefer to let it sit in a savings account. Well over half of women adopt this conservative approach to investing. Men, on the other hand, are more likely to seek out yield-oriented investments. According to the Sotomo study, these different approaches to financial investment are among the reasons for differences in wealth between women and men. And yet especially for women, a long-term and diversified investment strategy would be of tremendous value. Women more often work part-time and more often shoulder the bulk of unpaid care work. Both factors have the effect of reducing retirement assets. This is one reason women experience poverty in old age much more often than men, something confirmed by Pro Senectute’s old-age monitorClick here to go to Pro Senectute’s old-age monitor survey.

In the UBS study, seven in ten wealthy women surveyed said they wished they had been more actively engaged in their retirement planning when they were younger. UBS’s answer to this need is to offer women even more tailored advice and to motivate them to take their finances into their own hands. Lack of knowledge should be no reason not to do so: financial literacy can be learned.

In any case, not taking sufficient care of your own long-term investments is a missed opportunity. As the UBS study also showed: women who are actively involved in long-term financial decisions feel more financially secure and are less worried about their financial future.