There’s a notable gap between men and women when it comes to their use of financial products, particularly investments, reports Deutsche Bank Research reports, and this leaves women at particular risk for insufficient retirement income.
Based on Eurobarometer survey data, the firm says that the gender gap in financial product usage is most pronounced for investment products, such as stocks, bonds and investment funds. The women surveyed say they own shares or bonds at less than two-thirds the rate of men; and, they report owning investment funds at just over half the rate of men. Also, only 3% of female respondents had bought shares or bonds in the previous five years (2006-2011), compared with 6% of the men questioned.
The bank says it’s not surprising that women, on average, tend to own fewer financial products than men, “as this ultimately reflects structural differences in their professional careers.” It points to lower labour force participation and higher part-time employment for women, coupled with the fact that women, on average, earn lower incomes, which, it says, “simply translates into lower chances of building up financial assets during their working lives.”
Not only do these factors restrict women’s opportunities to accumulate wealth during their working lives, “but they also tend to go hand in hand with lower entitlements in the statutory pension scheme,” it says. And, it notes that low income in old age is a particular problem for women, given their statistically higher life expectancy “combined with the risk of being alone and in need of care when growing old.”
“Against this backdrop, there is a particular need for informed investment strategies for women,” it says. However, it also notes that what’s needed is individual solutions, “as the question as to whether certain financial products are suitable should not depend on whether a person is male or female but rather on existing wealth structures, individual preferences regarding yields and risks and the time horizon for the investments.”