Why women tend to hold fewer investments than men until older age

Throughout the vast majority of their lives, women are less likely to be ISA investors than men. They pay into far fewer Stocks and shares ISAs, so fewer of them have got to grips with investment and developed hands-on experience by gradually building a portfolio. Then, suddenly, later in life there’s a decent chance they’ll become investors overnight.

Why women are set to hold most of the investment wealth in older age

There are more baby boys born than baby girls, but the number of women overtakes the number of men at the age of 27, and by their 90s there are almost twice as many women as men. This comes down to the fact women tend to live longer. Not only do women tend to outlive men, they also tend to marry someone slightly older on average, increasing the chance that if they’re in a relationship with a man, they could outlive him.

It means women are likely to inherit at least some of their husband’s assets, including investments. The number of ISAs held by women over the age of 81 is always going to be higher than the number held between the ages of 78 and 80 – because there are more women in this age band. However, the sheer size of the jump likely reflects the fact that many will also inherit their husband’s ISAs.

The rules around ISAs mean that if the first of a married couple or civil partnership to die held ISAs, then the survivor can not only inherit their estate free of inheritance tax, they also get an extra ISA allowance known as an additional permitted subscription. This is equal to the higher of the value of the ISAs their spouse held at the day of death or when the accounts closed, which is typically once the estate administration has been completed. The surviving spouse or civil partner can then wrap any inherited investments and cash into their own ISA.

• Read: Women hold less in ISAs than men despite more women paying in

Why this can be an issue

During their lifetimes, women are less likely than men to invest. In the 2023/24 tax year, women paid into 1.67 million Stocks and shares ISAs, while men paid into 2.42 million. It means fewer women will be familiar with investment. Then, overnight, they may inherit all their husband’s investments. But they won’t necessarily have had a chance to build a portfolio and learn about investments with relatively small sums, before they’re thrown in the deep end. There’s a risk they make mistakes, are afraid to make any decisions at all, or that they move into cash and miss out on potential investment growth they may need to rely on later in retirement.

It’s why it’s so valuable for everyone to have the chance to pick up the basics as young as possible. Learning as you go is far easier, and can be less daunting, because you have far less to lose. It’s a good idea to drip feed a manageable sum into investments each month, so you can build your knowledge and experience at the same time as you build a portfolio.

If you reach mid-life and one half of the couple has taken the reins when it comes to investing, it’s essential they find a way to share the role, so their partner has a chance to get familiar with investments and become more comfortable making decisions.

Even if they do have a decent knowledge of investments, when people are bereaved, it’s easy to feel overwhelmed by new responsibilities. It’s one reason why it can be so valuable to get financial advice when your circumstances change significantly.