Women are stepping up their use of Isas to save but not enough to close the wealth gap between genders, according to research.
Data published by the government shows the number of women investing through Isas has increased by 272,000 in the last year to 11.3m.
But financial adviser Salisbury House Wealth warned women may be investing in the wrong type of Isa if they want to close the wealth gap on men.
The official data follows on from last year, when 82 per cent of women invested in cash-only Isas compared to 75 per cent of men.
Investment in cash-only Isas is less likely to generate the higher long-term returns needed to close the wealth gap, compared to putting money into stocks and shares Isas.
As a result, Salisbury House Wealth said the gender gap in the average market value of Isa savings is actually widening.
In 2015/16, it was 11 per cent, as the average value of an Isa held by men was £25,459 and for women it was £22,680. This is up from 9 per cent in 2013/14, when men had £22,933 and women had £20,417.
Tracy Browne, wealth management consultant at the Leicester-based adviser, said: “The gender gap in Isa savings is unfortunately getting worse - not better.
“It is great to see a growing number of women using Isas but it is important they adopt the right investment strategy for the long term in order to start closing the wealth gap.
“While saving in cash is often seen as a ‘safer’ option, it’s not the best for long-term savings growth.
“With interest rates on cash Isas so low, savers with cash products risk seeing the value in real-terms reduce rather than rise over time due to the effect of inflation.
"There’s a strong argument to say that women should consider a less cautious, risk-averse approach when investing to increase the possibility for real growth over the longer term and maximize their savings since they are more likely to be relying on their savings to last longer.”
Aj Somal, and IFA at Birmingham-based Aurora Financial Planning, said he has also noted this trend of women investing into cash Isas.
He said: “l have come across female clients who tend to have more funds in cash Isas than male clients, both young and old.
“Whether men tend to take more risks with their money then women over the longer term is open to academic research.”
