LXME – India’s first financial platform for women – in its Women & Money Power 2022 report suggests that 33% women in India do not invest at all and the number is as high as 40% in the 21-25 years age group. Overall 55% women in the country are either not investing or are unaware of their investments.
In association with Axis My India, India’s leading consumer data intelligence company, the survey was carried out among 4,000 women across different age groups, life stages and occupations across metros, tier 2&3 cities. It reveals where women stand on money matters and provided a critical overview of their financial awareness, attitude towards saving and investing, key barriers and drivers for making money decisions and involvement in decision making.
Saving and spending habits
Women are considered to be great savers however, LXME’s report suggests that 78% women save less than 20% on their income, 56% save less than 10% and 14% women do not save any money. This means majority is not even following the golden rule of saving at least 20% of your income.
Upon segregating the saving habits between working and non-working women, the report finds that 50% non-working saved between 6-20% of their household income in contrast to 45% working women. However, 31% working women saved over 20% of their income as opposed to 13% non-working women.
Among spending habits, the top three categories where women spend most are groceries, child education fees and personal shopping.
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Need for financial awareness
LXME’s report suggests a strong need to enhance financial awareness among women for them to make independent investment decisions.
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Overall 55% women were not making informed investment decisions; 33% were not investing at all and 22% were not aware of investments in their name.
38% of the respondents said that they invested with assistance, 76% of them took assistance from their partners & family. This highlights a major dependency among women on family and partners when it comes to financial matters.
Only 7% women investing independently through self-learning. This number was interestingly higher in non-metros as opposed to metros indicating a higher intent of learning from women in non-metro cities. Another figure supporting this insight was that 51% women in non-metros were making informed investment decisions as opposed to 41% in metros.
Financial planning should be taught as a life skill and the earlier women start managing their money the better for their future. This is very critical as the study shows in the age group of 21-25, 40% women were not investing all which was higher than average.
Majority of women invested only 6-10% of their income.
This could be derived from apprehensions related to investments primarily emanating from the lack of knowledge. A massive, 92% of women revealed that they do not access any financial investment related websites.
Another ill-informed fear, that investing is for the rich, turns out to true among the respondents as the highest 39% women stated low funds to be the reason for not investing their money. This is followed by lack of financial awareness at 12% and fear of losing savings at 10%.
The involvement of women in decision making was average for financial investments and high purchase decisions like buying a home, car and more whereas women had high involvement in purchase of essential household items, education of children & planning of holidays
Women investment trends
Women & Money Power 2022 report by LXME also provides key insights on the investment trends among women. In a shocking finding, the report states that 59% women had no insurance (life or health). This is despite the two years of pandemic.
Among the investment instruments preferred by women, Gold and FD tops the chart with 42% and 35% stating as their top choices respectively followed by PPF (23%) and traditional instruments like chit funds (17%). Women in India are clearly shying away from market based investments with a low 14% investing in Mutual Funds and just 10% in stocks.
So, overall, only 13% women invest in financial assets where as 35% women invest in traditional instruments.
In terms of allocating their income for investments, overall 9% of women from non-metros invest between 20-30% of their income as compared to only 5% women from metros. Whereas 23% women from metros invest 6-10% of their income as opposed to 17% women from non-metros. Women in non-metros are investing more of their income and more independently.
Investment Drivers
Women are always perceived to be more family oriented and keep family first. This was validated as family security and children’s’ education are the primary drivers for 67% women whereas only 12% women invest for self-security, retirement and starting their own business. Only 1% women invest for retirement. There may be a need for women to also priorities themselves and their financial needs.
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LXME’s Founder Priti Rathi Gupta said, “The Women & Money Power 2022 survey India resonates with the motive behind starting LXME – raising fearless financial feminists. Our extensive survey showcases a strong message on how women are not making their own money decisions. This stems from a lack of financial awareness leading to misconceptions and a fear of investing. While we have seen time and again how women make excellent money managers, we have noticed that the involvement of women in decision making is low to average for financial investments and high purchase decisions. In today’s world, where women are constantly breaking barriers, with every leading day they need to become more powerful, not just in society or in their organisations, but in financial prowess too. Learning to invest and gaining financial literacy is a necessity for the woman of today. In the end, it is taking control of their investments that gives them the power to have a say in their financial future and that of loved ones.”
LXME Women & Money Power 2022 survey was conducted among 4,000 women across the metros (60%), tier 2(29%) and tier 3(11%) cities. Both working and non-working women across the age groups 21-45 years were quizzed on their money mindset across earning, saving, spending & investing.
Commenting on the report, Pradeep Gupta, CMD, Axis My India, said, ““This survey is a reflection of the women of today’s India! They want to stand out from the crowd, achieve personal financial goals, take risks, are good at managing money and are optimistic of the future. Few are confident while making smart investment decisions while several others are motivated to seek help and work towards it. What is fascinating are the stimulants of investments. From investing for a child’s future or family security to investing for self-security and buying a house, the women of today possess a holistic outlook while parking money. These insights push us to think beyond the obvious and consider women as a huge potential market for targeting investment products and education. While the shift is gradual and the path for investment is partially blocked with barriers such as fear of losing money or lack of knowledge for few, these could be removed by imparting awareness and providing education and thereby instilling confidence.”
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