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This is why women need to start investing - and what to do

Here’s everything you need to know, from maximising your pension contributions to opening a Lifetime ISA and a Stocks & Shares ISA

Invest In You - Investment 101 stocks pensions lifetime ISAs explained
Barbara George
Freelance Journalist
Updated: January 4, 2024
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For too long, the world of finance has been seen as a masculine domain, but a revolution is brewing. Women are stepping onto the trading floor, cracking open investment portfolios, and reshaping the landscape of wealth creation.

Staggering stats reveal 52% of men in the UK have given investing a go compared to just 32% of women according to a 2023 survey, meaning there is still a huge gender investing gap but the number of women investing is on the rise.

Whether you're a seasoned investor or just starting your journey, the tides are turning and us women can start making a change, one stock purchase at a time.

What should you be looking out for if you want to get on the investing ladder?

I spoke to Laura Lambie, a Senior Investment Director at Investec Wealth and Investments. She said: "The easiest way to start investing is to make sure you're enrolled in your company's pension scheme and that you're making as much contribution as you can, because you're not paying tax on it."

Retirement Coin Jar© Nora Carol Photography
Your first port of call should be getting your pension in check

Check your pension

In the UK, the retirement age is currently set to 66 years old, which might seem far away for some. However, understanding your pension early on is crucial for securing a comfortable future. 

The two main pension types in the UK

  1. State Pension: This is a flat-rate payment provided by the government to everyone who reaches State Pension age (which is rising to 67 in 2028). To qualify, you need to have paid National Insurance contributions for a certain number of years. 
  2. Workplace Pension: These are employer-sponsored schemes that you can be automatically enrolled in if you're working. You'll typically contribute between 3% and 5% of your salary, and your employer will usually match this amount or contribute a higher percentage. It is then invested to grow over time. When you retire, you can usually access your pension pot as a lump sum, an annuity (regular income payments), or a combination of both.

Sadly, biology and the cost of childcare are against us. Laura explains that when she looks at older couples "the woman is ordinarily worse off on the state pension side. It's the men that tend to have the big pensions because they have had uninterrupted employment and pension contributions for 30 years."

What do you need to do if you don't know about your pensions or if you have changed jobs and now have multiple pension pots?

  • Request pension statements: Contact your employers and private pension providers to understand your current contributions and projected retirement income.
  • Seek professional advice: Don't hesitate to consult financial advisors who can help you navigate the complexities of pensions and tailor a plan for your specific situation.
  • Utilise online resources: The MoneyHelper website and government portals offer valuable information and tools to guide you through your pension journey.
A female guest working on the porch of the guesthouse where she stayed during her trip to Japan.© Getty
52% of men in the UK have given investing a go compared to just 32% of women

Remember, your pension is an investment in your future. By taking the time to understand it now, you can unlock a world of possibilities for a happy and financially secure retirement.

UK pensions are crucial for a comfortable retirement, but did you know about the Lifetime ISA (LISA)? 

Open a Lifetime ISA

This account offers a 25% government bonus on savings (up to £1,000 per year) used for either buying your first home or retirement.

You have to open a Lifetime ISA before you are 40 years of age and you can contribute up to £4,000 yearly. If you want access to your fund before you are 60 you will face a 25% penalty for early withdrawals. However, if you are terminally ill you can access the fund beforehand.

New Year 2024 on Wood Block on Top of Stack of Gold Coins© Nora Carol Photography
Open a Lifetime ISA before you turn 40 will be invaluable in the long run

Laura emphasised that maximising your pension and opening a Lifetime ISA should always be your first port of call. "You need to make sure you've got enough cash to see you through emergencies and that will be different for different people. And then you could start investing in a stocks and shares ISA," she said.

Consider a Stocks & Shares ISA

We already know about investing in ourselves (hello, gym memberships and that killer expensive collagen serum!), but what about investing in your future? Enter the Stocks & Shares ISA. 

A Stocks & Shares ISA is like a secret financial growth garden: you plant your savings in stocks and funds, they get watered by market trends, and (hopefully) blossom into future financial freedom.

Young Asian businesswoman analysing and checking stock market over smartphone in downtown financial district. Stock exchange market trading board in background.© Getty
Comparison websites are a great resource for helping you choose a Stocks & Shares ISA

"The easiest way to do that and the cheapest way to start is to look at one of the comparison websites," Laura revealed. "And there's lots and lots of different ones. Hargreaves Lansdown, AJ Bell and Nutmeg are a couple [of good options]."

DISCOVER: How taking control of my finances helped me find my confidence 

Choose your investments, from tech giants to sustainable beauty brands, and tailor your ISA to your style (and risk tolerance). You can also save at your own pace. It is worth pointing out that investing has risks, but with the right research and resources you can unlock a world of financial possibilities. 

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