Mind the Gap

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Duncan Farmer looks at the different way women deal with investments

In the latter half of last year and the first months of this year the news has been dominated by issues affecting women – the gender pay gap and the harassment (and worse) that many face are just two topics to have generated huge comment.

The end of the old tax year and the start of the new one is traditionally the time that people invest any spare cash in an individual savings account, and figures show that there is also a gender savings gap. Women take out more ISAs than men, but they tend to put their savings in cash ISAs, which pay a guaranteed but unexciting rate of return, whereas men put theirs in stocks and shares, which have a higher risk but potentially a higher return.

In the mortgage arena, where women make up more than a quarter of all loans, women are also more solid and are far less likely, according to statistics, to fall into arrears or to have their home repossessed. However, life for female applicants is not easy.

According to research in the US two years ago, lenders were charging women a higher rate of interest than men even though female borrowers were a far safer bet.

One of the unspoken concerns of lenders is that a woman’s income is likely fall should she decide to start a family. Under the Equality Act, however, they are not allowed to ask such questions. Instead, generally, one of the questions on mortgage application forms asks whether an applicant could foresee a change in their circumstances over the next five years.

If you are pregnant, or if you are planning to get pregnant in the near future, you should answer this question honestly, but there is a fair chance that it will have an adverse effect on your application as a lender will consider your income while you are on maternity leave rather than your usual salary.

The penalty for lying on an application form is, in theory, that the lender could repossess your home, but if, as most women do, you keep up the repayments that scenario is extremely unlikely, so keeping mum may be your best option.



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