Women Look Set to Embrace ISAs

ISAs look set to become women's second most popular savings vehicle over the coming months, according to the Newton Investment Index. For the first time, Newton Fund Managers Limited looked deeper into the savings intentions of women whilst analysing research for the Investment Index. The Newton Investment Index tracks the savings intentions of adults in Great Britain using research conducted by MORI Financial Services.

As one might expect, savings and deposit accounts (including TESSAs) are still the most widespread savings vehicle amongst women. When questioned, one in four women (26%) said that they would save using these accounts over the next six months. 12% of women said that they would save in ISAs, 7% in national savings (including Premium Bonds), 4% in unit or investment trusts (excluding PEPs or ISAs) and 4% in stocks and shares.

Newton believes that ISA appeal amongst women has been aided by:

• PEP Fever - as it contributed to increased awareness of tax-exempt savings vehicles
• The accessibility of the new savings vehicle due to the wide range of ISA providers
• The flexibility of the new savings vehicle
• Low cost
• And increased investment confidence amongst women

According to the Newton Investment Index, work status has a key influence on women's savings capabilities. Fewer women (12% of the female population) than men (17%) said that they would invest in ISAs during the first six months of the ISA age.

Furthermore, housewives are less likely than full-time working women to save in the two most popular savings products over the coming months. When questioned, 39% of full-time working women and 25% of housewives said they would save in savings/deposit accounts over the following six months, with one in five (20%) full-time working women and one in ten (10%) housewives saying they would invest in ISAs over the following six months.

When questioned, full-time working women said they would save 163415 on average on savings/deposit accounts over the following six months, which compares to an average of 163242 among housewives. (Table 1)

Table 1: Women's Savings and Work Status

Source: Newton Investment Index/MORI Financial Services

The example of savings/deposit accounts also shows that women's saving habits are affected by age. 45-54 year old women said that they would save an average of 163432 in savings/deposit accounts over the following six months, compared to 163185 on average among younger women aged between 16 and 24. This comes as in-house research revealed that 56% of Newton's female clients that intent to invest in ISAs would do so in order to save for their retirement.

Table 2: Women's Savings Habits Affected by Age

Source: Newton Investment Index/MORI Financial Services

Sara Royle, PR Manager at Newton Fund Managers Limited:

"Women are becoming increasingly concerned as to who will provide for them later in life and this is reflected in the fact that women savers look set to embrace ISAs. We are very interested in studying how their savings habits change throughout their lifetimes. For example, in-house research amongst Newton's female clients discovered that retirement saving is by far the most important savings motive. In addition, 15% of Newton's female prospective ISA investors were planning on using ISAs to save for holidays, 5% mortgages, 4% cars and rather surprisingly only 4% would use the new savings accounts to save for their children.

The only significant differences we found between the savings motives of Newton's male and female clients are that men are even more inclined to save for their retirement (74.5%) whilst women are more inclined to save for holidays (15% of women compared to 1.9% of men)."

Technical details

The Newton Investment Index tracks the savings intentions of adults in Great Britain using research conducted by MORI Financial Services. The aim of the Index is to track savings intentions twice-yearly. MORI Financial Services interviewed a representative sample of 2,000 adults aged 16+ across Great Britain, between 11 and 16 March 1999. Of the total sample interviewed, 1,154 respondents were female. Data have been weighted to the profile of all adults. Newton Fund Managers Limited is regulated by IMRO and the Personal Investment Authority.