Female investors on average GBP15,000 worse off than men by 2030 due to gender pay gap

A new study by Freetrade has revealed the “gender investment gap” in the UK, with women expected to make a much smaller return on their investments by 2030 compared to men if they start investing now as a result of the gender pay gap. 

Based on Office of National Statistics data, the research shows that if both men and women started investing in 2020, men would make a GBP1,147 greater return on their investments. This is because the gender pay gap means women have less to invest and will therefore receive a much lower monetary return. 

British men, who take home an average of GBP31,445 per year, are expected to make GBP3,299 this year if they start investing. British women, on the other hand, will only make GBP2,152 because their average annual salary is much lower at GBP20,515. 

By 2030, with men able to invest much more than women due to their higher annual returns, the difference becomes staggering. The research estimates male investors will have made GBP44,123 by the turn of the next decade. For women, however, this figure is just GBP28,786. Overall, this means there is a GBP15,337 discrepancy. 

Using the same methodology, researchers at Freetrade have analysed how much men can make from their investments compared to women in each UK city. 

The city with the highest gap between men and women is Lichfield, Staffordshire. The current gender pay gap is GBP17,531 there, according to the ONS, with men earning GBP39,910 per year and women earning GBP22,379. 

Because of this, female investors stand to make GBP24,599 less than men by 2030. Men will have made a GBP56,001 return on their investments compared to GBP31,402 for women. 

Just behind Lichfield are cities such as Brighton (where the gender investment gap is GBP18,946), Lancaster (GBP17,297) and Derby (GBP17,297). 

The city with the smallest difference is Nottingham where the investment gap will be GBP7,211 by 2030. Men are expected to have made GBP34,663 compared to women at GBP27,452 by 2030. Closely behind Nottingham are Dundee (GBP7,301), Swansea (GBP7,638) and Westminster (GBP7,743). 

The ten cities with the largest and smallest gender investment gaps by 2030 are Lichfield, Brighton, Lancaster, Derby, Newport, Oxford, Southampton, Aberdeen, Canterbury and Chester. 

Dan Lane, Senior Analyst at Freetrade, comments: “We should be investing around 10 per cent of our income every year. With the average Brit estimated to make a 4.9 per cent return on stocks and shares annually, it is a useful way for us to reach our financial goals and give ourselves a safety net for the future. 

“That said, Freetrade’s research has shown that women stand to make a much lower overall return on their investments than men because the gender gap in the UK means they have less to invest. This discrepancy highlights just one of the many reasons why it is imperative for employers to continue their efforts to equalise the gender pay gap. 

“These figures should not discourage women from investing as figures show the gender pay gap is closing every year. As it does, we hope women will eventually be able to see roughly equal returns from investment in monetary terms as men, so now is a perfect time to start building your portfolio”.