Half of women know ‘little’ about their investments

Half of women know ‘little’ about their investments

Almost half of women (47 per cent) admit to knowing “very little” about where their money is invested, recent research has revealed.

This figure jumped to 52 per cent for women over the age of 65 - the cohort who are likely to have the largest portfolios.

The findings of a survey of more than 2,000 UK adults showed a lack of knowledge by a significant number of consumers about how their money is managed, particularly in relation to pensions and investments.

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The high level of women who do not know where they are investing their money should “speak volumes” to asset managers and advisers, one of the researchers has said.

WA Communication's head of financial services, Cat Ommanney said the lack of knowledge among the public about their finances showed that an “understanding gulf” exists between firms and their target audiences. 

While the percentage of people who did not know where their investments were made was lower across all genders (38 per cent), the figure still “paints a stark picture”, according to Ommanney.

Pension mystery

The research also showed a dramatic lack of understanding among consumers when it comes to pensions.

Pensions are “apparently a mystery to most,” Ommanney said.

Nearly two-thirds (63 per cent) of those surveyed admitted to not knowing who manages their pension.

This rose to 81 per cent of those closest to retirement, aged over 65, while just 5 per cent said they know “a great deal” about who manages their pension.

“With the rising cost of living, expected increases in mortgage payments and whispers about scrapping the state pension triple lock, financial consumer confidence is more important than ever before. 

“Rather than simply launching new products to market, it’s time for companies to invest in better communication, closing the understanding gap and creating an informed and empowered public,” Ommanney said.

The research noted that the lack of knowledge among consumers around pensions and investments was compounded by the volume of products available on the market. 

Almost two thirds (63 per cent) of consumers said that the number of financial products makes it difficult to tell them apart, while nearly a quarter (22 per cent) of those aged between 25-34 are confused by the number of offerings available.

Despite the knowledge gap among many consumers, many had strong views on how their money ought to be managed.

Nearly two thirds of those surveyed said having an investment manager that operates in an ethical way is important to them, while 55 per cent said they would like their pension to be invested in an ethical and environmentally-sustainable way.