Black women lead the charge with a renewed focus on investing

New Scottish Widows research highlights how Black women are approaching investing into their futures.

Two-thirds (67%) of Black women feel investing is “for people like them” emphasising a growing interest in financial freedom, alongside a need for more guidance on the long-term benefits that pensions provide. 

New Scottish Widows research (PDF, 4MB) highlights how Black women are approaching investing into their futures. The report found that Black women are leading the charge with a renewed focus on investing with over a third (34%) choosing to invest in stocks and shares, compared to 18% actively saving into pensions.  

This compares with only one in five (21%) White women choosing to invest into stocks and shares. 

The Scottish Widows Women and Retirement Report (PDF, 4MB) – now in its 20th year — also identifies systemic challenges, including the ethnicity pay gap — where Black communities earn 6% less than their White British counterparts. Many Black women navigate financial challenges such as lower salaries, with over half (58%) believing that finding a job is now more important than it was for previous generations, making every financial decision crucial. These barriers hinder Black women’s ability to build long-term financial security, leaving them facing some of the lowest projected retirement outcomes.  

Stocks and shares becoming increasingly popular with Black women reflects a growing preference for alternative investment options and a greater desire for flexibility in retirement planning. It also underscores the need to address barriers and misconceptions to ensure Black women don’t miss out on the benefits of a well-rounded, accessible financial planning option such as a pension.  

Bola Sol, Financial Adviser, Money Columnist and author of ‘Your Money Life’ and ‘How to Save It' said: “Stocks and shares can feel like an appealing option for Black women because of the accessibility and the sense of control they provide. The ability to access funds more easily from investments compared to pensions is certainly a factor, especially for those navigating financial pressures or systemic barriers such as the ethnicity pay gap.” 

The report also reveals notable differences in financial strategies - women from underrepresented communities (53%) are significantly more likely to invest outside of pensions in property, stocks and bonds, compared to White British women (37%).¹ Meanwhile, Indian (35%) and Pakistani women (34%) are slightly less likely to look beyond pensions, reflecting the nuanced approaches within Asian communities. Despite these differences, roughly half (45%) of all women don’t feel confident managing their pension for retirement, meaning there is a need for guidance and support to help them navigate different investment options available.  

Bola Sol, Financial Adviser, Money Columnist and author of ‘Your Money Life’ and 'How to Save It' continues: “Financial habits are deeply influenced by cultural experiences. For many Black women, investing in stocks and shares aligns with a desire for growth and flexibility in how that money is used in 1, 3, 5 or 10 years. In contrast, Asian women may prioritise property as a means of financial security, often tied to family or community legacies.

"I have witnessed this repeatedly, both in personal conversations and professional interactions. White British women tend to rely on pensions, potentially due to greater access and familiarity with these schemes." 

“Each group’s approach is shaped by access to knowledge, generational wealth and values, emphasising the need for tailored financial education to bridge gaps and empower informed decision-making.”  

Mary Agbesanwa, Pension and Investments Expert at Scottish Widows, said: “In the last few years, we’ve made massive strides as an industry to make investing more attractive to women indicating a positive step towards empowerment and control for women over their financial futures. I am glad to see Black women beginning to take steps towards financial independence and improving their confidence related to investing.

"However, I hope this confidence will result in Black women considering a broader range of retirement options - while stocks and shares can complement retirement planning, relying on them exclusively risks leaving critical gaps in financial preparedness."  

“Pensions remain the most reliable pathway to achieving long-term financial security, with advantages such as income tax relief and capital tax relief, a pension pot can grow at least 40% larger compared to investing the same amount directly into stocks and shares.”²   

“And being auto-enrolled into a workplace pension scheme is a convenient way to save for retirement without active decision-making. This underlines the importance of increasing awareness of pension benefits while promoting more active involvement in retirement planning.”  

To access the Scottish Widows Women and Retirement Report, visit here (PDF, 4MB).  

¹See graph detailing data in notes to editor’s section 

²Based on the England and Wales income and capital gains tax rates as of 30 October 2024. Assumes the person pays the basic rate of income tax and that they invest the income tax relief into their pension (if they paid the higher rate of income tax, then the benefits of investing into a pension would be even higher). Assumes the person would be investing in the same stocks and shares, whether through a pension or not. 
 

Download full press release (PDF, 200KB)

Notes to Editor

Methodology

The report forecasts that the gender pension gap could close in another 20 years if current progress continues, based on the ONS’s Wealth and Assets Survey data. The methodology, carried out by Frontier, calculates the average annual progress that has been made between 2008 and 2020 in the gender gap in private pension pots held by those aged 50-64, and then assumes this average annual progress continues from 2020 onwards.

The main survey included general outcomes on pensions and retirement planning and was carried out online by YouGov Plc: across a total of 5,102 adults aged 18+ weighted to be representative of the UK population, and separately for 1,039 adults aged 18+.  YouGov also conducted a second survey to better understand investment behaviours and shifts in attitudes, with 3,650 adults aged 18+, weighted to be representative of the UK population. Separately for 575 adults aged 18+ to better understand investment behaviours and shifts in attitudes of minority ethnic groups. 

Full details can be found in the full Scottish Widows Women and Retirement Report. We use the Pension and Lifetime Savings Association (PLSA)’s living standards as a measure. The PLSA defines a minimum retirement as someone living with no car, spending £50 per week on groceries and spending £20 for each birthday and Christmas present. The latest PLSA thresholds have increased from 8-34%. 

About Scottish Widows  

Founded in 1815, Scottish Widows is part of Lloyds Banking Group, the UK’s largest digital bank and financial services group. With more than £210bn assets under administration and 6 million customers, Scottish Widows’ award‐winning product range includes workplace and individual pensions, annuities, life cover, critical illness, income protection as well as savings and investment products. Customers can access our products and services through independent financial advisers, directly, and through all Lloyds Bank, Bank of Scotland and Halifax branches. 

Scottish Widows Woman and Retirement Report graph detailing investment differences *

Black women are more likely to invest outside of a pension compared to White British People

Percentage that say that they invest in stocks and shares, property, government bonds, or other non-pension investments
 

White British               37%                            
White non-British       37%    
Indian                           35%    
Pakistani                      34%
Black                            47%    

Scottish Widows’ key initiatives to date

• Partnerships with community leaders such as Selina Flavius (founder of Black Girl Finance) 
• Sponsorship and collaboration of the Black Girl Finance Festival (2023 and 2024), an annual event attended by over 250 women, which aims to break down barriers to financial literacy and provide women with the tools they need to feel comfortable and confident in future retirement planning