Fear of investing mistakes could cost Millennial women almost half a million pounds, claims research

Millennial women could be missing out on nearly half a million pounds by retirement age due to investing fears, according to new research.

Data from digital investing platform Moneybox suggests women aged 30 to 45 across Britain have an average of £49,608 saved towards retirement, compared with men in the same age range having an average of £85,529 saved.

However, by the time they reach retirement age, this gap could increase to a massive £463,644.

The forecast is similar for Gen Z women and girls, aged 14 to 29, who currently have £31,000 less saved on average compared with men and boys of the same age. This could result in women having £1,691,395 less than their male counterparts in retirement, Moneybox suggests.

Alongside differences in pay, the research suggests that confidence could be a key factor in this gap.

“Many women are doing the right things, but fear of making the wrong decision or losing money stops them from engaging fully with their finances,” explained Brian Byrnes, director of personal finance at Moneybox.

Women are far more likely than men to feel anxious when it comes to handling their long-term finances, with almost a quarter (23 per cent) of women reporting anxiety around this, compared with 15 per cent of men.

Additionally, nearly two in five women (37 per cent) don’t feel confident in managing or achieving long-term money goals such as retiring early, and nearly a third (29 per cent) don’t feel in control of their financial future.

Clare Seal, a financial coach who managed to clear her own £27,000 debt, believes that women’s financial anxiety is rooted in a “better safe than sorry” mindset, “which leads to a deep-seated fear of the stock market due to its natural ebb and flow”.

She said: “In my coaching, I see that women worry about making a mistake, which in the long run can be even more costly than sensible and responsible investing. To close this confidence gap, we have to help redefine risk – not as a danger to be avoided, but as a necessary tool for growth.”

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Eleanor Moir, 28, went through this journey herself when she started investing. Initially, she felt overwhelmed at the number of choices out there.

“My biggest anxiety with investing was kind of, ‘where do I put it?’” she said. “There are so many options out there, so I would say I was not that confident.”

After speaking to family members who have invested and finding information on platforms like AJ Bell, she eventually took the plunge. Years later, she feels like she has grown in confidence. “I think, you can't control what happens in the market, but I'm less worried about ups and downs.

“I'm more confident in what I'm investing in because I have had positive returns. Where I’ve made a mistake, I can rectify what I’m investing in and continue based on what I’ve learned from that.”

Though confidence seems to hold many women back from investing, women tend to outperform men when it comes to returns, according to a study by Revolut.

“This isn’t a capability gap – it’s a confidence gap,” says Brian Byrnes. “The biggest shift women can make isn’t taking huge risks, it’s building confidence to start, ask questions and stay engaged. Overcoming fear is often the first and most important step towards a more secure retirement.”

Dr Ylva Baeckstrom, a senior finance lecturer at King’s Business School, agrees that women make capable investors.

However, she takes a different view on the solution. “Branding women as underconfident is unhelpful as it places the onus on fixing women instead of fixing outdated and complicated ways in which financial investing is communicated,” she said.

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“The financial services industry and policy makers need to make personal finance accessible and attractive to underinvested groups, including women.”

Perhaps unsurprisingly, the data from Moneybox also suggests that financial confidence generally grows as household income increases.

But a recent study into financial confidence by Octopus Money shows that people from less privileged backgrounds are generally less confident that they will be able to retire comfortably compared with people from wealthier families – even when they’re on the same salaries.

Ruth Handcock OBE, CEO of Octopus Money, said: “Two people can earn the same pay – but one builds savings and plans ahead, while the other constantly worries about making ends meet.

“That’s not about effort, it’s about know-how. Nobody teaches you how to manage money if you didn’t grow up around it.”