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This article is part of the FT’s Financial Literacy and Inclusion Campaign
International Women’s Day should be a day of celebration — but there’s nothing like the gender finance gap to kill the party.
The gender pay gap has torn a depressingly large hole in women’s long-term financial prospects. The average pension pot for a 65-year-old woman in the UK is around one-fifth of the average pot of a man of the same age.
Women are not only less likely to invest, they also have less money to put to work in the markets. Persistent bias against mothers, part-time working, and childcare costs are all big problems that are unavoidable. So, how could better financial education help?
Much more than you might think, judging by the growing success of membership communities that aim to get women closer to their cash.
Money is power, so educating yourself about it is an essential prerequisite for gender equality, argue Anna-Sophie Hartvigsen, Emma Due Bitz and Camilla Falkenberg, whose feminist take on financial literacy is shaking up the world of money.
They founded Female Invest, a financial education platform for women, in Denmark in 2017. It now claims members in 95 countries.
“The narrative is shifting — more and more women understand that money is not about buying more stuff, it’s about buying freedom and living life on your terms,” says Hartvigsen.
And female financial education — “fin-ed” — is fast becoming an exciting space in the fintech world.
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In common with start-ups Vestpod and YourJuno, an app for young women dubbed “the Duolingo of money”, Female Invest does not sell investments to its online community members (yet). This adds a layer of trust that women seem to appreciate. Getting all your financial information from the companies you buy financial products from is never wise. Just look at how the investment platforms pump pricier actively managed funds, when the majority rarely outperform cheaper index trackers.
All three of the fin-ed platforms emphasise the community aspect, and the educational content on offer falls into the category of “guidance” rather than more expensive and strictly regulated financial advice. This helps to resolve another obstacle for millions of women and men: traversing the advice gap.
Female Invest’s emphasis on bite-size content with no jargon has won it a quarter of a million social media followers (not all of them female) with more than 35,000 paying a monthly subscription to access online content and interactive webinars.
The Danish trio’s debut book, Girls Just Wanna Have Funds, delivers punchy personal finance lessons about resetting your finances, investing for the future, and maximising your earning power. Finance can be overwhelming, so pulling together the whole financial picture is something that women value.
I was alerted to the group by a neighbour, who started her maternity leave by attending a Female Invest event in London. “Finally, I feel like money makes sense to me,” she told me. For her, finding time to learn about money had been the biggest barrier.
Despite its success, Female Invest struggled to attract interest from venture capital funds. “They didn’t believe women were interested in investing,” says Hartvigsen.
She lost count of the times she was told women would never pay for a subscription service if they could just Google information about investing, or read the free resources on fund platform websites.
“We wanted to create a safe space where women feel confident to be themselves, and ask stupid questions — not that there are any stupid questions when it comes to money and investing,” explains Due Bitz. “I mean, if you don’t know what to Google, how should you ever find this information?”
Women face plenty of specific issues with their personal finances where learning from others’ experiences can be really empowering. I attended a Vestpod event a while ago where women compared notes on parental leave policies at different companies — valuable information that is often super-hard to find out in real life.
The YourJuno app offers modules on finance for freelancers. I have so many female friends who have ended up going freelance after having children to control their work-life balance better, but did not know how to price their services or simply how to set up a pension.
Making it easier to learn about the financial essentials in a way that can fit into modern life addresses a crucial part of the issue. But there are much bigger educational lessons for the financial industry, and society as a whole, to learn.
We need to start a bigger conversation about why women of all ages have less money. Unpaid work and childcare are part of the problem but what are the solutions for splitting earned wealth more evenly between couples?
The more we educate ourselves about how the financial odds are stacked against women, the louder all our voices should become.
The writer is the FT’s consumer editor and author of ‘What They Don’t Teach You About Money’