Savings gender gap exposes cost of women’s savings habits

Women’s lack of savings cost them over £160 million in lost interest during 2006, according to new research from AXA.

In stark contrast men managed to set aside around £15.25 billion in savings accounts last year, earning some £457.6 million in interest alone. However, women could only manage to save £9.9 billion last year, earning approximately £297 million in interest.

The new findings show that men out-saved women by 1.5 times in 2006, setting aside around £5.3 billion more than women in total. And AXA says this amounts to a loss of £160.64 million in interest payments for women who couldn’t save as much as their male counterparts.

The AXA research has revealed that the average saver set aside £1,003.20 last year. However, while the average man parted with £1,206.50, the average woman only had an extra £794.89 to save - £411.61 less than men.

Colin Nelson at AXA, comments: “It is good news to see so many people setting aside money in short or medium term savings. A total pot of £25 billion for last year alone is very healthy and shows that Britain is becoming a nation of savers.

“However, women are falling some way behind. While £411 a year doesn’t sound like much, after only five years the average woman’s savings pot would be over £2,000 smaller than a man’s – not to mention the lost interest.

“Saving is a good habit to get into if you can afford it. This country’s buy now, pay later attitude can’t be sustained forever, so if you can save to buy you will be in a far better financial position in the long term.”

AXA says the current savings landscape is perfect for people looking to build a savings pot, with many providers passing on rate rises prompted by the recent Bank of England base rate increases.

However, the company warns that many consumers aren’t committed to saving and says that this could have harsh consequences in the future. AXA research shows people who spend more than an hour reviewing and planning their finances at home saved an average £1,532 last year - £500 more than the national average, and around £1,000 more than people who don’t review their finances on a monthly basis at all.

Colin Nelson added: “This research is supported by the findings of AXA Avenue, a social experiment we recently concluded in Brighton. This showed that the participants who invested the most time looking at their finances as a whole reaped the greatest rewards.

“If we all spend just an hour a month reviewing our outgoings and incomings, or just 15 minutes a week, we’re convinced that the nation’s financial health would improve dramatically.”