Women and money: Why 'She' isn't investing (and what we can do about it)

21 May 2025

Women and money: Why 'She' isn't investing (and what we can do about it)

Dr Ylva Baeckström

Dr Ylva Baeckström shares her latest research into the finance industry, uncovering just how big the equality gap is between men and women. Drawing from her own work and a variety of published research, she shares insights on why women invest less, and what we can do about it.

Ylva.Baeckstrom.AfterDinner.ElevateCity.SDG5.Oxford

We are all too familiar with the financial inequalities that women are exposed to – and when it comes to women investing their hard earned savings, the data are stark.

In the UK, men have £567 billion more invested than women. They’re twice as likely as women to have stocks and shares, and earn on average £260,000 more during their careers. This leaves women having 35% less in their pension pots by the time they retire.

Whilst there are jurisdictions that are increasing their attention to gender inclusive practices, (such as the UK Parliament study of sexism in women’s financial services careers), a current backlash shows we are experiencing a less accommodating political landscape in places. This fatigue has been linked to the slowing or reversal of progress in the workplace, with the gender pay gap widening in 60% of OECD countries between 2021 to 2022.

With a professional background in financial services, fintech and psychotherapy, I now dedicate my career to impactful research that supports women’s careers in financial services and women as investors.

In March 2025, I published a paper about women’s career success in the finance industry, co-authored with Dr Nina Rezec and Professor Mike Clinton. Below, I’m sharing some of our key insights on why women are facing more barriers, and how we can reimagine a financial services industry that is sustainable for both people and planet.

The truth about women’s career trajectories in financial services

Unsurprisingly, a woman’s career path in financial services is a lot less favourable than a man’s.

Although joining the industry in similar numbers, globally women have just 18% representation in senior leadership and only 5% becoming CEO's. Women in finance are also paid up to 66% less than men – a dramatic contrast to the 15% UK gender pay gap.

A brief history in bias

Whilst many explain away these differences by women self-selecting away from competitive careers in finance, or are “less financially confident and more risk avoidant”, there are many exceptions to these blanket assumptions.

It’s critical to consider women’s historical exclusion from finance. Women were not born to be less confident investors – instead, they were socialised to become this less confident about making financial decisions. As my research demonstrates, women’s lower risk , confidence and financial knowledge are situational and not universally true for all women.

Women were – and still are – awarded lesser legal rights compared to men. Only 14 countries in the world have gender equal policies and until the mid-1970s women didn’t have the legal right to become members of the London Stock Exchange or even open bank accounts in their own name.

It’s clear that there is nothing wrong with women or their preferences, rather there is something wrong with how women have been, and still are, treated.

A $700billion untapped market

Everyone stands to gain from making careers in finance attractive for women.

The World Economic Forum shows that the financial services industry can increase its earnings by US$700 billion globally by improving its services to women. Naturally, women gain by increasing their own financial wealth and decreasing their financial dependence on others.

The right financial advice also helps. My research shows that women who have female instead of male financial advisors invest 11% more and can be equally, or even more, financially confident, knowledgeable and risk taking as men.

Women in finance leadership drive sustainable business practices

Women finance leaders also make better decisions for their firms.

In particular, women leaders are celebrated for their corporate governance – management strategies that have positive knock-on effects on corporate performance. Women’s skills are particularly useful in financial services, an industry that suffers from overconfident decision making and excess risk taking, biases that contribute to financial crises, such as the credit crisis.

Finally, women leaders and investors care more about sustainability. My ongoing research suggests women have higher allocations to stocks of companies with high sustainability (ESG) rating compared to men. It seems, as leaders, women care more about their firms' contribution towards sustainable targets.

Closing the gap on gender inequality in finance

It’s important to remember there are many things that can be done to reduce the financial gender inequality.

To start, the financial services sector must improve its communication and culture to become more accessible and fairer for all consumers and employees, regardless of gender or background. For too long, this industry has been gatekept at the expense of women and other underrepresented groups. Its customer base is diverse – its workforce and leadership need to be too.

We also need to increase the focus on creating accessible financial education from a young age. Today, 76% of young Britons leave school without enough financial knowledge to manage their personal finances, and do so facing an increasingly expensive and complex financial future.

Then we challenge inequalities by making finance part of our everyday conversation. Through sharing our financial knowledge with each other, we can empower everyone to take ownership of their own finances and support others.

Whilst we might not be near to closing the financial inequality gap, it’s important to remember that historically this is the most financially independent many women have ever been. Fifty years ago, many of the lives of the Western women of today would be impossible and globally women’s wealth growth outpaces that of men. It goes to show how progress can be made and how we together have the power to eradicate financial gender inequality.

About Dr Ylva Baeckström

Dr Ylva Baeckström is Senior Lecturer in Finance at King’s Business School and the Theme Lead for Sustainable Finance for the Centre for Sustainable Business. Her research focuses on behavioural finance, entrepreneurship, investment decision-making and financial advice with a particular interest in gender and inequality in the financial services industry. Before joining King’s College London, Ylva was the CEO of a fintech start-up, following over 15 years working for large international banks in London, including Standard Chartered Bank, Coutts & Co and Morgan Stanley.

This feature was brought to you by the Centre for Sustainable Business, as part of their Inclusive Sustainability 2025 campaign. Find out more about their work here.

References and further research