76% of British women asked were uncertain how they’ll ever be able to give up work…
Whilst the Queen might be working until she is physically unable to, new research from Unbiased.co.uk shows that 23% of British women over 50 currently fear they will have no choice because they won’t have sufficient money to retire. The research also indicates that only 28% of women over 50 know what their pension pot should look like, compared to 45% of their male counterparts.
The problem is partly caused by the gender pension gap and inequality of pay, and partly by the current cost of living crisis. Currently, 76% of women over 50 don’t believe they will be able to retire at age 66, with 15% over 65 who had planned to retire in the next 3-6 months, now returning to work. Almost half (48%) of those surveyed said they worried that what they had saved for retirement now wouldn’t cover the cost of living.
The research also showed that almost half of women over 50 (49%) have changed their food shopping habits, compared to 34% of men, a third of British women over 50 have loaned money to their children to cover the cost of living and 77% of British women over 50 have had to dip into their savings to cover the cost of living.
Founder and CEO of Unbiased.co.uk Karen Barrett:
“The pension gap is not going to just disappear, nor is the earnings gap. Add the fact that women also continue to be the primary group taking a career break to raise children and it’s clear that women should be prioritising financial advice as soon as possible.
Here’s what you can do to take control:
1. Pay more into your pension when you can (especially in the early years)
The earnings gap doesn’t really appear until women hit their 30s, so maximise your contributions in your 20s and let compound interest get to work on them. If it’s too late for that, remember that one extra percentage point of contributions can make a big difference at any time. Unbiased has an online pension calculator which makes it easy to work out exactly how much you’ll need in retirement and what that means for your savings right now.
2. If you’re in a couple, agree on your shared financial goals
Have a healthy shared approach to managing your money – don’t let either of you handle it all because you both need an ongoing awareness of your financial position and responsibility for handling it. Set up a shared bank account rather than pooling all your money
3. Protect your assets
If you have significant assets in your name when you marry, it can be a good idea to ring-fence these and keep them in your own name. It may be that you have inherited assets including jewellery, art or furniture, or that you own a significant asset such as a car.
4. Mind the pension gap
In the same way, you plan your parenting together, plan the financial impact of raising kids together. As a family, you need to manage any impact on earnings one or both of you may have if you take a career break. Ensure that payments continue into both pension pots to ensure neither of you suffers a pension shortfall or becomes dependent on the other’s pension in later life.
5. Be aware of your different financial roadmap
Many problems arise from treating women’s financial journeys as identical to men’s. Note the key milestones that lie ahead and work backwards from them to develop a savings plan. For instance, as soon as your first child is born, you know the approximate dates they will start school, higher education, work etc, and also the periods during which you may be earning more or less.
6. Be prepared if things don’t work out
Whilst you may be lucky enough to enjoy happily ever after, it pays to be pragmatic. The Office of National Statistics reveals that 42% of marriages now end in divorce and that the number of people aged 55+ divorcing has reached an all-time high. Women will benefit from expert planning when it comes to potential pension sharing orders and asset investment as part of a divorce settlement
7. Don’t be pigeonholed
Many financial tips directed at women inevitably make certain assumptions – one of those being that they will have children, and another being that they will be the one who takes the career break. But it doesn’t have to be that way. If you are more naturally inclined to follow the career route, then pass the other tips to your partner – or rip them up. Because financial advice is about following your goals, not a set path that someone else has designed for you.”
For more straight-talking financial advice, head to Unbiased.co.uk or listen to The Unbiased Podcast, Your Money, Your Future wherever you find your great audio experiences.
