Women Take Lead in Household ISA Investments Decisions

Written by Karen Bryan

female investorA study carried out by The Share Centre highlights that women are active in making investment choices, contradicting the stereotype of it being men who make more of the household investment decisions.

The results of the study show that 60% of women take the lead in decisions about investing in Stocks and Shares ISAs in their household. A further 12% make joint decisions with their partner. 25% of women surveyed had dealt on behalf of a male relative or partner.

The majority of female ISA investors plan to use their investment to provide an income in retirement. It’s always said that you should invest over the long-term.

However, most women appear to be adopting a ‘buy and hold’ strategy, as only 17% make monthly trades. More regular trading, especially if you can buy when the price is low and sell when the price is high, can bring higher yields.

I must admit that I was like that with my personal pension pot. I put my pension contributions into two different stakeholder funds with an insurance company, and left them there for more than a decade. There was an option to easily switch funds when logged into my account. I only used that option to transfer into a cash fund prior to buying an annuity.

I looked into transferring my personal pension pot into a Self Invest Personal Pension (SIPP). I concluded that I didn’t want to get involved in regular trading. Perhaps my pension pot could have grown more if I had taken a more hands-on approach.

Although women are active in investment, only 27% of the sample said that they would feel confident talking about the stock market, but 47% felt that they would be able to get their point across. Almost 33% wouldn’t know where to start.

I wouldn’t feel that confident in talking about the stock market, partly because even when you try to do research, the stock market can behave unpredictably.

This lack of confidence isn’t borne out by action, as 58% of women invest directly in shares. Only 28% made the decision to invest in funds.

84% of the women surveyed said that they would hold onto a share which was falling in value to see what happened. That’s a tricky one to judge. Sometimes it’s a temporary drop in value and a buying opportunity. Sometimes the shares can keep falling.

In my opinion, it’s a positive thing that more women are active, willing to take risks and fairly confident in investing. With the demise of final salary pension schemes (where the value of your pension is guaranteed), and the increase in defined contribution pensions (where the value of your pension depends of your pension pot), an increasing number of people will have to make more investment decisions.

If you want to have a comfortable retirement, then maximising the benefits of tax relief on pension contributions, in tandem with the tax-free status of Stocks and Shares ISAs, can help you build up a nest egg.