Women opened more Isas than men in the last tax year – but not the right type if they want to maximise their savings, experts are warning.
Females opened a total of 11.3 million of the tax-free savings accounts in the 2015/16 tax year, compared to 10.8 million opened by males, according to latest figures from HM Revenue & Customs.
But men opened more investment accounts than women in the year, with a total of 1.1 million stocks & shares Isas opened by men compared to just 892,000 opened by women.
Instead, women are far more likely to open a cash account, with 5.2 million cash Isas opened by females in the year compared to 4.4 million by males. But experts warn that savers putting money in low-interest cash accounts risk losing out in real terms as inflation erodes the value of savings.
Tracy Browne, wealth management consultant at Salisbury House Wealth, says women need to open more investment accounts if they want to close the gender wealth gap.
She says: “It’s great to see a growing number of women using Isas, but it is important they adopt the right investment strategy for the long term to start closing the wealth gap.
“While saving in cash is often seen as the safe option, it’s not the best for long-term savings growth. With interest rates on Cash Isas so low, savers risk seeing the value in real terms reduce rather than rise over time due to the effect of inflation.”
Some 272,000 more women opened as Isa last year compared to the previous year. But 82% of females stuck to cash accounts, compared to 75% of men.
Men aged 65 and over were the most likely to open an Isa, with a total of 3.3 million opened in the year by this age group, closely followed by women of the same age group, who opened 3.2 million accounts.
Women are also not saving as much as men, with the average female’s Isa worth £22,680 compared to £25,459 for the average male’s account. However, the amount women saved was up 9% from the previous year.
Men aged 65 and over have the largest savings pots, with the average Isa for this group worth £43,740 compared to £41,279 for women of the same age.
Ms Browne adds: “There’s a strong argument to say that women should consider a less cautious, risk-averse approach when investing to increasing the possibility for real growth and maximise their savings.”