Surprise fall in ISA subscriptions among women is a warning to the industry, says Scottish Friendly
- The number of women subscribing to ISAs has fallen at its fastest annual rate since 1999
- In 2016-17, there were 786,000 fewer female ISA subscribers than in the previous financial year
- Moreover, only four per cent of women who subscribed to a stocks and shares ISA were aged between 25 and 34, prompting fears of a long-term savings gap says Scottish Friendly
A sharp drop in the number of women opening ISAs in the UK is a major wake-up call for the industry, according to Jill Mackay, savings and investment specialist at Scottish Friendly.
Analysis by the Centre for Economics and Business Research on behalf of Scottish Friendly found the number of female ISA subscribers fell by 114% between 2015-16 and 2016-17, the largest annual decrease since records began in 1999.
Women still account for the majority of all ISA subscribers (52%) but there were nearly three-quarter of a million (786,000) fewer female subscribers in 2016-17 compared to the previous financial year.
In 2011-12, women accounted for the majority of ISA subscriptions for the first time and the number continued to rise until 2015-16 where it has since plateaued.
But Jill Mackay believes this recent drop in numbers is a warning to the industry that more needs to be done to ensure women continue to take advantage of tax-efficient savings.
She says: “Women are more likely to be financially disadvantaged by career breaks to raise a family or to care for relatives.
“Until now, the growth in ISA demand among women could perhaps be attributed to rising employment and higher incomes for women.
“Sadly, it appears we have now reached a tipping point and it’s important the industry closely monitors this situation to ensure the number of women taking advantage of tax-efficient savings doesn’t fall away.”
Although ISAs generally are equally subscribed by men and women, stocks and shares ISAs are heavily favoured by older age groups and are also more popular among men. The latter accounted for 57% of all stocks and shares ISA subscriptions in 2016-17.
Among women who did subscribe to a stocks and shares ISA in 2016-17, only 4% are aged between 25 and 34 and a further 13% between 35 and 44.
By contrast, there were 73,000 men aged between 25 and 34 that subscribed to a stocks and shares ISAs in 2016-17. This is more than double the corresponding figure for women of the same age (36,000).
Mackay adds: “The under-representation of female investors needs to change, especially in an environment where women’s long-term savings typically fall well behind men’s over a lifetime.
“For small amounts, for example £10 a month, women can start investing into a stocks and shares ISA, and the key is to try and start doing so as early as possible.
Jill Mackay provides some insight for first-time female investors:
- Try and get started as soon as you can, even if you only have small amounts to invest. A little and often approach to investing can soon add up.
- Many people are unaware that you can have more than one type of ISA so don’t overlook investing because you already have a cash ISA
- The ‘stepping stone’ approach could be used as and when you have more disposable income. For example, start from £10 a month and if you can, increase it by what you can afford every year
- If you have a Junior ISA for your children, once it’s open anyone can contribute so why not ask the family to get involved. Grandparents may have more disposable income to invest towards their grandchildren’s future
Remember that the value of investments can go down as well as up and you could get back less than you paid in.
Kevin Brown, PR & Communications Manager
About Scottish Friendly
Scottish Friendly is a leading UK mutual life and investments organisation. It provides investors and their families with a wide range of investment and protection solutions and provides life and investment products and services to other financial organisations.
Scottish Friendly has roots stretching back to 1862. Established as the City of Glasgow Friendly Society, its name changed in October 1992 when it took over Scottish Friendly Assurance.
In recent years Scottish Friendly has significantly restructured its business. The Group has flourished through a three-part growth strategy of organic growth, mergers and acquisitions, and business process outsourcing.
Scottish Friendly, Scottish Friendly House, 16 Blythswood Square, Glasgow, G2 4HJ
Scottish Friendly Assurance Society Limited. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority.