Combating the gender wealth gap

Staci West 05/08/2021 in X Millennials

The Tokyo 2020 Olympics will be wrapping up this weekend and, at time of writing, Great Britain is sitting sixth on the table for gold medals and fourth overall. The big story has been 13-year-old Sky Brown winning skateboarding bronze and, in doing so, becoming Great Britain’s youngest Olympic medal winner of all time. She also completed an all-teen women’s skateboarding podium (first and second place were 19 and 12 years old respectively).

Sky isn’t the only woman making headlines at the Olympic Games this year. We’ve seen the Norwegian beach handball team hit back against sexist uniforms, athlete’s mothers speaking out about breastfeeding restrictions and qualifications, and Simone Biles taking a step back for her mental health. These Olympics have been about much more than medals for these athletes.

“Money is power”

The US women’s soccer team famously filed a lawsuit over equal pay last year. The judge rejected the allegations and ruled in favour of the U.S. Soccer Federation, but just last month, the men’s team backed the women’s dispute saying “U.S. Soccer has ‘persistently treated the women as second class throughout the 35-year history of the Women’s National Team.’” The women’s team is currently appealing the decision.

How many times have we seen that women have to be better just to be paid as much as their male counterparts? It’s especially true in sports. Women, in any industry, won’t be fully equal with men until we are financially equal with men. This means we must tackle the gender wealth gap.

The gender wealth gap

The gender wealth gap is how much money women have and keep in comparison to men. This differs to the gender pay gap which illustrates how much women earn In comparison to men. There are several reasons why the gender wealth gap persists: pink tax, less time in the workforce and childcare to name a few.

But there’s also the impact of compounding. Compound interest, put simply, is ‘interest on interest’ and the effects are incredibly powerful. For example, if you invest £100 and get 5% interest in year one, you have £105 after 12 months – a gain of £5. The next year, your 5% interest equates to a gain of £5.25 because you are getting interest on last year’s interest too. Over a long period of time this compounding effect can make a huge difference to your pot of money.

But women are statistically impacted by compounding in two ways. Firstly, they tend to have more debt than men (compounding works both ways – not only does it increase your savings, but it increases your debts too) and second, women tend to invest less, either in the stock market or in real estate and business ownership. This causes a widening in the gender wealth gap.

What you can do today

There are three things a woman can do today to help close her personal gender wealth gap. Pay off her debts, start investing early with whatever she has, and stay invested for the long haul. It’s crucial to stay fully invested and keep re-investing any interest. If you’re investing for the long term, it is important that you hold your nerve when the market is struggling and continue investing. It’s very hard to get rich quickly, but it’s quite possible to get rich slowly if you keep re-investing and you have time on your side.

P.S. To all the parents, or grandparents, reading this… talk to your kids about money, but do it equally. Data from found there’s even a gender allowance gap! A boy’s average weekly allowance is $13.80, while a girl’s average is just $6.71*. Pay attention to the messages you’re sending your kids about gender equality and finances.

*Source:, July 2018

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions.Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice.Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.