Women hold more in cash savings than men: This is why it might be time to start investing

Research findings published by Money Marketing (5 March 2025) reveal that more women than men hold ISAs. However, women typically favour Cash ISAs, while men are more likely to invest in Stocks and Shares ISAs.

According to Boring Money (5 March 2025), this “gender investment gap” increased in 2025 for the second year in a row. There are now 3.3 million more male investors than female investors in the UK.

Of course, cash savings could be an important part of your financial plan. They offer quick and easy access to funds, making them a great option for covering short-term costs and emergencies.

However, relying on cash for long-term savings and shying away from investing could make it harder to build the wealth you need for the future. Here’s why.

Even modest levels of inflation could reduce the spending power of your savings

Inflation is the rate at which the general price of goods and services increases. Unless the interest rate on your cash savings remains consistently above inflation, the “real value” of your money could diminish over time.

This means that, after adjusting for inflation, your cash has less purchasing power than it did when you put it in a savings account. For example, the Bank of England’s inflation calculator (27 October 2025) shows that in 2025, you’d need £138.94 to buy products and services that cost just £100 in 2015. This represents a 38.9% price increase.

While inflation, as measured by the Consumer Prices Index (CPI), has fallen from its October 2022 peak of 11%, it has remained higher than the government’s 2% target for most of the past four years.

As the graph below shows, the CPI was 3.8% in the year to September 2025, which is the highest it’s been since January 2024.

Source: BBC (6 November 2025)

It’s important to note that even if the total balance of your cash savings increases due to interest, this “sticky inflation” could mean your money is losing real value.

Read more: “Sticky inflation”: What it means for your finances as a woman and how to take charge

Also, if inflation rates fall, prices may still be rising – just at a slower rate. As such, even modest rates of inflation could erode the purchasing power of your cash savings over time.

Indeed, this table from Schroders (14 March 2024) shows how even low inflation rates, such as 2% and 3% could affect £10,000 of cash savings over the long term.

Source: Schroders. Assumes no cash interest is earned on the original deposit.

You could be taxed on the interest your savings earn

Recent research by Lloyds (28 February 2025) has found that 24% of UK adults believe that all savings are tax-free, regardless of the type of account they have.

Unfortunately, this is a misconception.

In the 2025/26 tax year, you can save or invest up to £20,000 in a single or multiple ISAs without paying tax on the interest, income, or capital gains you earn.

However, any savings you hold outside an ISA wrapper may attract tax if the interest you receive exceeds your Personal Savings Allowance (PSA).

The PSA varies depending on your Income Tax band, as shown below.

Source: Gov.uk

As you can see, you don’t need to earn much interest on your savings before tax becomes payable. If you’re an additional-rate taxpayer, you have no PSA at all, so you’ll usually pay tax on all of the savings you hold outside of ISAs.

When coupled with the potential effect of inflation, over the long term, your tax liabilities could significantly reduce your cash savings.

Investing could provide greater returns over time

Keeping your wealth in cash savings accounts might feel like a safe and easy option. In contrast, investing may feel daunting and “risky”.

A study by Aviva (11 March 2024) found that 37% of women do not invest compared to 24% of men. Of the women who don’t invest, 18% said the risk is too high, and 10% said it’s too complicated.

However, numerous studies have shown that over time, investing in the stock market could offer the potential to achieve higher returns than cash savings.

Schroders (21 August 2023) reviewed the performance of cash and investments (in the form of large-cap stocks) over 96 years (1926 to 2022).

Source: Schroders (21 August 2023)

The graph shows that cash savings had between a 54% and 66% chance of beating inflation over all time periods.

Not only did stocks have a better chance of outperforming inflation than cash, the likelihood of this happening increased over longer time horizons – reaching 100% at 20 years.

More recently, This is Money (11 February 2025) looked specifically at the performance of Cash ISAs and Stocks and Shares ISAs.

Between 1998 and 2024, Stocks and Shares ISAs achieved significantly higher growth than Cash ISAs.

Source: This is Money (11 February 2025)

The same initial investment of £10,000 at the end of December 1998 returned £59,130.90 more over 26 years when invested through a Stocks and Shares ISA than when held in a Cash ISA. This represents a difference of 316.38%.

Of course, past performance is no guarantee of future results, and it’s important to be aware that your investments could go down as well as up.

As such, it’s important to consult a financial planner who can help you build an investment portfolio that balances risk effectively and aligns with your long-term goals.

Get in touch

If you’re keen to make the most of your wealth but don’t know how to get started with investing, I can help.

To find out more, please get in touch by email at lottie@truefinancialdesign.co.uk or call 03300 889138.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Approved by 2plan wealth management 21/11/25