KEY POINTS:
Women make almost all consumer purchase decisions and are typically household managers and accountants, yet they are financially clueless when it comes to investments and planning for retirement, a new report shows.
The report, commissioned by Wizard Home Loans, surveyed 1000 Kiwi women between February and July this
year about investment, home ownership and affordability, and retirement.
While 82 per cent of the women surveyed managed their household finances - paying the bills, the mortgage and budgeting - a significant 29 per cent were planning to rely on national superannuation to fund their retirement.
Their number one concern for the future was financial security. One in three said they did not feel financially secure. Almost a quarter (23 per cent) said they were worse off financially than at the same time last year. More than one in 10, or 14 per cent, believed cash savings would be their main source of income in retirement. And 41 per cent believed home ownership was out of their reach.
Financial planner Liz Koh said the figure of nearly one in three women who planned to rely solely on the government pension to keep them in their dotage was "pretty awful".
"I think women have lower expectations [than men] in a way because they earn less and are more likely to experience financial setbacks."
Taking time out to have children was a big financial barrier, while a divorce often left women solely caring for dependants.
"They don't see themselves as being able to accumulate a lot of money because these things are in the way. There are some harsh realities that force them to be different from men."
Financial adviser and author Lisa Dudson said there was more information about financial education and investments available now than ever before. "But our financial health is getting worse. We make it harder than it has to be."
She said many women were scared of finance and didn't believe in themselves. She heard a lot of excuses. "I'm waiting to win the Lotto" or "I'll marry a man with money."
These days, a man was not a financial plan, she said.
A Retirement Commission survey last year found our top investors were usually men. They typically had life insurance, could survive for three months without income, had worked out retirement needs, and half of those surveyed owned shares or had them in the past. They also had a net wealth of $600,000 or more, and earned $100,000 plus. Meanwhile, those with low financial literacy were more likely to be women (63 per cent), and were less likely to have credit cards, investments and mortgages, and often had savings of less than $5000.
But Retirement Commissioner Diana Crossan said lack of financial education was not the main reason women didn't invest for the future.
She said about a third of retired people did live on national super, so the women surveyed were reflecting that. "They're probably being realistic," she said.
New Zealand was a low-income economy, and many people had little discretionary income. Women earned about 15 per cent less than men.
"It's not as if women with money to invest don't know what to do. They're not stupid - if they've got money they go and get advice.
"It's usually the people who don't have any money who say, 'I don't even know what the word invest means, really'. They might save through fairly ordinary financial products like bank accounts... but in terms of investing for the long term they just don't have that kind of money."
Koh believed women were more prepared to ask for help when it came to investments. "Men think they can do it all themselves."
She believed men and women were equally financially illiterate. "But I think women are taking more steps to do something about it, by actively seeking advice."
Wealth adviser and financial author Joan Baker, based in Queenstown, told the Herald on Sunday women were "a little bit afraid" of taking risks when it came to investments, and a more aggressive approach was needed. "Women often make poor investment decisions, as they opt for things that will not give them enough return."
When women did decide to tackle the sharemarket, however, she said they often made better investors than men. "When they do it, they make prudent purchasers and prudent managers, they get better advice and they don't change their minds as much."
* WISING UP TO MONEY
Finance-savvy widow Moira Ransom, 52, is, in her own words, "a recovered financial idiot".
For many years, she and her husband Nick thought they earned reasonable money, and got what they wanted when they wanted. They put purchases on credit cards and thought "we'd pay it back sometime ... but sometime never came".
Five years ago, her husband's death sparked Moira into financial action. "Being on my own meant I had to be more sensible."
She didn't know anything about starting a share portfolio - "They can be scary. I used to flick over the financial pages of the newspaper because they overwhelmed and intimidated me. I wonder if a lot of women may feel like that."
She sought advice from various financial planners until she found Liz Koh, who has helped her build a retirement plan and invest her husband's life-insurance money wisely.
"With a lot of the planners I spoke to, it was like, 'Oh, poor woman on her own. Here, we'll do it for you'. But I wanted to do it myself, and Liz has taught me. Between the two of us we have built a retirement plan for me."
Moira now has a varied portfolio, her money in trusts or long-term investment funds. Her financial education has been "life-changing".
"Before, I had always thought saving meant a miserable life, that if you saved for retirement then you'd probably be too old to enjoy it. I was rather naive. I thought saving meant going without; I have now learned that the opposite is true."