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Women and financial products

March 12, 2013

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Men and women differ when it comes to their use of financial products, as illustrated by Eurobarometer survey data. The gaps are most pronounced for investment products such as shares or bonds and investment funds: only 9% of the women surveyed say they own shares or bonds and only 5% investment funds (male respondents: 14% and 9%, respectively). Also, only 3% of the female respondents had bought shares or bonds in the preceding years (2006-2011), whereas the figure was twice as high for the men questioned. Where do these differences originate and do they pose a problem?

First of all, it is hardly surprising that women on average tend to own fewer financial products than men as this ultimately reflects structural differences in their professional careers. Lower labour force participation (in 2011 the male employment ratio in the EU stood at 70.1% as opposed to 58.5% for women), the fact that large numbers of women are employed on a part-time basis and on average earn lower incomes simply translates into lower chances of building up financial assets during their working lives. At the same time, these factors do not only restrict women's opportunities to accumulate wealth during phases of active employment but they also tend to go hand in hand with lower entitlements in the statutory pension scheme. Last but not least, low income in old age is a problem besetting women in particular. In addition, they have a 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 - especially because they may hold fewer funds or require greater flexibility in view of changing employment situations. Unfortunately, surveys on financial education also suggest that women are worse off compared with men, especially regarding long-term financial planning and the choice of suitable products. Hence, the fact that differences with respect to products are visible should also act as a reminder for women to seek information (more) actively and at an earlier stage. What is called for rather than generalisations, however, 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.

See also:
Towards gender-balanced leadership: What has not worked - and what may

Who is washing the dishes tonight? The gender gap in household work: causes and effects

 

 

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