From pensions to savings apps: money advice for millennial women

Posted by
Sarah Pennells
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Financial planning is a serious subject, so why are women so often talked down to? Here’s Stylist’s guide to managing your money effectively (no beans on toast dinners required).

This article will not tell you how to save so you can finally splurge on your dream shoes. The word ‘investment’ will not refer to handbags. There will be no tips on bargain hunting. 

New research by online bank Starling shows there’s a big gender divide when it comes to the way the media talks about women and money, and about men and their finances. The research found that, as a gender, we’re often advised to spend less and budget, whereas men are encouraged to invest and increase their wealth.

Buying a designer handbag that will last a life time may – or may not – be a good use of your money. But it’s not an investment, it’s spending. Putting money into a stocks and shares ISA or a pension – that’s investing.

It’s not just the media that’s been putting men into a box marked ‘investing’ and women into one labelled ‘frittering it away’. The financial services industry has been saying, until fairly recently, that ‘women don’t invest’. I know, because when I was setting up my financial advice website, Savvy Woman, several companies used those exact words.

Thankfully, things are changing. The investment industry has realised that ignoring women doesn’t make good economic sense. Technology means more of us are banking, saving and investing via our mobile phones. There’s also a lot of financial information online, so you can gen up on anything you’re not sure about before, or instead of, talking to an adviser.

But, while it’s 100 years since some women in the UK got the vote, we’re still not on an equal footing with men when it comes to money. Women earn less over their lifetime, on average, than men. And we live longer, meaning we have less money but need more to live on once retired.

On top of that, we’re less likely to invest and try to grow our wealth. Government figures show that while a million-plus men have a stocks and shares ISA, only 870,000 women do. Why is this? Investing can seem complex and the jargon off-putting. 

My own research shows that 50% of women think that the way financial services companies, advisers and the media talk about investing isn’t relevant or easy to understand. Meanwhile, a report by the Fawcett Society found that 50% of women are likely to say they understand stocks and shares, compared to 75% of men. There’s no doubt that the industry overcomplicates investing and pensions, and it can seem very male-dominated. 

But money is too important not to get involved. Saving, investing and pension funds might not set your pulse racing, but if you know what your money is doing, it means you can spend more time on what really matters to you, rather than worrying about your finances.

Here are some steps to get you on track to a richer future.

Clear any debts

Debt should always be your starting point. Most of us have debt, whether it’s a student loan, mortgage or credit card. I wouldn’t advise anyone to wait until they’ve paid off their mortgage before they start saving or investing, but debt that stops you from doing things you’d like to do – whether that’s buying a flat or taking a sabbatical from work – should be tackled. 

Research shows that while women owe less than men, the debt we have can be more expensive. The debt advice charity StepChange says that in 2017, women who asked for advice owed £11,842 on average, whereas men owed £15,405. However, figures from the Money Advice Trust for 2016 show that women aged 18-24 owed an average of £926 on credit cards while men owed £790. 

With credit cards charging interest at an average 18.9%, not clearing debt can be expensive. The first rule is to never only pay the minimum amount on a credit card. If you only pay the minimum on a credit card charging 18.9%, it could take you 18 years to clear a £1,000 debt. If you owe money where you’re paying different rates of interest, target your payments to the debt charging the highest rate of interest first.

Always make sure you pay whatever you’re contracted to pay on other debts, such as credit cards and bank loans. That could be a minimum payment (for a credit or store card) or a fixed monthly amount (for a loan). If you don’t make those payments, you’ll get hit with missed payment charges and your credit rating could be affected. 

Store cards charge more than credit cards, and credit cards typically charge more than bank loans (unless it’s a 0% interest balance transfer deal). Once you’ve paid off your most expensive card, close the account and move on to the next one. And if you’re really struggling, seek advice from charities such as StepChange, National Debtline, Citizens Advice and PayPlan – all of which are free to use.

“It’s often said you should have a minimum of three months’ expenses in savings, but if that feels unrealistic, don’t let it put you off”

Make the most of savings

Few of us get excited about savings products. The key is to stop focusing on the product or the fact you’re depriving yourself of spending money today and concentrate on what having savings will let you do, whether that’s going on holiday and not coming home to a large credit card bill or being able to get married and not start your life together in debt.

If you find it hard to set aside any money every month, there are low - and high-tech ways to tackle it. The low-tech way is to set up a standing order so that a regular sum goes out of your bank account into a savings account. Try and do this so the money leaves just after your pay day and not at the end of the month. You won’t miss it if it isn’t there to spend.

If you prefer, there are apps that can help you save, such as Chip, Plum and Cleo. They work in a similar way by looking at your banking transactions and working out how much you can afford to save relative to your outgoings.

There’s no ‘best’ savings account, as it depends on what you’re saving for and whether you need to be able to access your money or are happy locking it away for a set period. Websites such as and are good places to start for comparing interest rates. 

Bear in mind that savings rates are currently very low – the top easy-access accounts are paying a measly 1.3% as I write – and inflation is more than double that, so leaving your money in a savings account in the long term will mean its spending power reduces. Anything below 1% and you should definitely shop around. You can do better if you’re just starting to save, as regular savings accounts with Nationwide, First Direct, M&S Bank and Santander allow you to pay in between £25 and £250 a month and all pay 5% interest (although you usually have to have a current account with them to qualify).

It’s often said you should have a minimum of three months’ expenses in savings, but if that feels unrealistic, don’t let it put you off. Aim for a month’s worth to start – enough to cover your bills with a bit left over. In terms of how much to have in savings before you start investing it, you want to avoid having to cash in your investments for an unexpected expense. Some people won’t sleep at night without six months’ expenses in the bank, while others may feel happier with less.

If you’re a first-time buyer saving for a house deposit, use a Help to Buy ISA because you’ll get a top-up from the government (worth 25% of what you’ve saved up to a maximum of £3,000). In fact, it may be worth opening one even if you’re not sure you’re going to buy your first home. That’s because the interest rates are better than on many cash ISAs, and you’ll only sacrifice the government bonus if you don’t use the money for a house deposit.

“There is a pensions crisis looming for women”

Enrol for a pension

There is a pensions crisis looming for women – we save less into our pensions than men, live longer, and are likely to be paid less over the course of our career. In fact, figures from the Office for National Statistics show that while men have £40,000 in their pension, on average, women have just £28,000.

But more women are saving into a pension than ever before – partly down to automatic enrolment. Instead of having to fill in a form to join your employer’s pension scheme, most people aged 22 or over are signed up without doing anything, and you can always leave if you want to.

Before automatic enrolment was phased in from 2012, only 40% of women were paying into a workplace pension. Now, for the first time, it’s the same as the percentage of men, at 73%. If you’re automatically enrolled, the amount you pay into your pension will have increased as of 6 April, from 1% of your salary to 3%. That’s quite a jump, but don’t opt out unless you really can’t afford the payments.

The best workplace pension schemes are those that are linked to your salary – either final salary ones or ones based on the average salary over your career. Sadly, these pensions are an endangered species. Until automatic enrolment came in, some employers, especially smaller ones, were able to set up pensions and not pay a penny into them. 

That’s changed now, but some employers only pay in the minimum. Ask your HR department if you can pay in extra and if your employer will match your contributions. If they don’t, it may be worth starting a separate pension or a Lifetime ISA (which lets you save towards a house deposit and/or your retirement, with the government adding an extra 25% up to the value of £1,000 a year) if you’re torn between saving for your retirement and a house deposit.

If you’re self-employed, your income may fluctuate, which means it’s harder to commit to regular saving. But most personal pensions let you pay in a one-off lump sum and paying into a pension can reduce your tax bill, too. There are lots of different pension providers and the choice can seem baffling. If you can afford financial advice, it’s worth it (according to, the average cost of advice for setting up a £200-a-month pension is £580).

The type of funds your pension money is invested in are more important the younger you are. That’s because they have longer to make a difference. Pension schemes used to send out deadly dull brochures but they’ve improved recently and some have user-friendly information online. Take time to dig beneath the surface.

These days, most pension providers have ready-made investment funds where you decide how much risk you want to take and they’ll suggest funds that fit your risk profile.

“It’s clear the investment industry is finally waking up to the fact women are eager to secure their futures”

Invest wisely

While it’s certainly not the case that women don’t invest, we do tend to invest less than men and are more risk-averse. But investing isn’t complex and, right now, may be a better choice than saving. The good news is that a raft of user-friendly investing platforms have launched in the past few years. They’re not designed to be female-focused but, generally, they talk about investing in a way that’s much more inclusive.

Platforms such as Nutmeg, Moneyfarm, Moolah, Wealthsimple and Wealthify let you invest by matching the risk you’re happy to take to their funds. Other investing platforms, such as Fidelity and AJ Bell Youinvest, let you bundle investments together and access hundreds of different funds – like an investing sweet shop.

Then there’s crowdfunding, where you can invest directly in a growing company. But this should be for money you’re happy to lose, not for money you need for your retirement. Lots of companies with grand ambitions fail to deliver.

However you choose to manage your money, it’s clear the investment industry is finally waking up to the fact women are eager to secure their futures. And no, you don’t need to survive on beans on toast in order to do so.

Financial Glossary

AER: Interest on savings is expressed as an annual equivalent rate: the rate you’d receive if the interest was paid once a year. Most accounts do this, but some let you accrue interest monthly.

APR: You’ll see this next to the interest rate on loans and credit cards. The annual percentage rate takes account of any charges you have to pay as part of the loan.

Asset class: This refers to the different types of investments, such as property, company shares and bonds. All are at risk of fluctuation, so it’s wise to put your money in varied asset classes.

Bond: Can be used as a name for fixed-rate savings accounts, but it also refers to long or short-term IOUs for company or government loans. If you invest in a bond, you lend money to an organisation and get paid regular interest.

Defined benefit (DB) pension: You are promised a percentage of your salary when you retire. Otherwise known as a final salary pension, although it can also include career average pensions.

Defined contribution (DC) pension: The amount you retire on depends on how much you and your employer pay in and how well the investments have grown.

Equities: Another word for stocks and shares.

FTSE 100: The average share price of the 100 biggest companies listed on the London Stock Exchange. It’s a weighted index, so a change in the share price of a large company has a bigger effect than a change in the share price of smaller ones.

Funds: Rather than buying shares or bonds in individual companies, which can be risky, funds let you spread your money between dozens of different companies.

ISA: There are two types of individual savings account: cash ISAs and stocks and shares ISAs, which involve locking your money away for a longer period. Interest on cash ISAs is tax-free and you don’t pay tax when you cash in a stocks and shares ISA.

Words: Sarah Pennells / Photography: Ellis Parrinder / Images: Getty