Number of women high earners rises faster than men in the last year
Radius Equity points out that this is a far faster rise than the climb in male high earners, which was up only 13% in the last year from 2.81 million to 3.18 million.
According to Radius the proportion of high earners who are women has climbed to 28% of the total up from just 21% ten years ago in 2003-4 (see pie charts).
Radius Equity points out that many of these women will be on incomes far higher than the £41,865 threshold of the 40% tax rate for high earners. This means they would be well placed to benefit from the attractive tax breaks available from the Government from investing through the Enterprise Investment Schemes (EIS) and Seed Investment Schemes (SEIS).
Gary Robins, director at Radius, says, “It’s great to see the gap between men and women close as the economy recovers. What’s important now is that the gap between the value of the assets owned by men and women closes – as that will provide women with more influence.
“However, there is a tendency amongst financial advisers to offer women savings products with low risk returns rather than investment products with higher risk weighted return. We know anecdotally that women are rarely introduced by financial advisers to slightly more complex products, like EIS or SEIS, despite the 30% income tax break that EIS offers.
“Unfortunately there is a widely-held assumption that women are going to be too risk averse to consider investing in private companies. The reality is that some of the most effective private equity investors are women and that all investors should consider some exposure to private companies in their portfolio.
“The attraction of the EIS is that investors can get exposure to private companies in their portfolio at reduced risk because of the tax breaks that the Government puts on the table.
“We often have to fight the misconception that the EIS is only for ultra-high net worth individuals. The reality is that investing through the scheme is attractive to a broad church of mass affluent professionals as well as the traditional high net worth investors who have been interested from the start.”
Radius explains that the number of women who now pay the Additional Rate has also risen in the last year by 9% compared with an 8% rise for men. The Additional Rate (45%) is paid by those earning over £150,000. There are now 48,000 women paying the highest rate compared with 44,000 the year before.