If there ever was an example for how differently men and women behave when it comes to investing, the response to the coronavirus outbreak could be it.
According to a survey by Aegon of 1,100 consumers, women tend to have a less hands on approach when it comes to investing their pensions and and seem to be less worried about the effects of the virus on their pots.
The pension provider found that only a third (33%) of women think now is the right time to invest in their pension, compared to 46% of men.
Nearly seven in 10 men have paid attention to stock market performance, whereas just over half (52%) of women did; while 55% of men checked how their investments were doing, but only 33% of women did so.
The survey was conducted in March 2020.
Aversion to risk just as damaging
Kate Smith, head of pensions at Aegon, believes that the findings confirm that women are less impacted and worried about short-term market movements than men.
She said: “By contrast, men are said to be more active investors and are more likely to take short term risks to boost their return”.
But this doesn’t mean that one has it better than the other.
“The continuation of women taking a more cautious approach to saving in volatile markets and a more pronounced aversion to risk may contribute to a greater future pension gender gap,” Smith said.
“It’s well known that having children or caring responsibilities mean women are more likely than men to take time off from work. And even if time away from the workplace is relatively brief it can have a huge impact on their overall pension savings, which can be compounded by a part time return to work.
“By the time they return to work, women lag behind their male peers in both income and retirement savings, making it difficult to catch up and those returning on a reduced hours basis will find increasing pension contributions extremely challenging,” she added.
That is why their investment strategy should mirror their attitude towards risk, Smith believes.
“Ultimately, women’s more cautious approach to how their pension contributions are invested, means following the current crisis they may be less likely to benefit from any bounce back in financial markets.”
