At the last Women in Business Expo in October 2019, I was struck by the amount of like-minded professional women who have made incredible successes of their individual paths in business – I’m not surprised that 53% of UK millionaires are predicted to be female by 2025!1
However, it is clear that women can still be reluctant to discuss their finances and long-term plans. But planning for the future is more important than ever – unfortunately, women are still at a disadvantage, with several factors making it harder for us to build up a comfortable amount of retirement savings.
Although it’s important to protect and build on our business success, we need to take time to plan ahead for a secure future, too.
MIND THE GAP
A recent report by NOW: Pensions has revealed that women in their 60s face an enormous £100,000 pensions gap. They are expected to have accrued a pension worth £51,100 to retire on – a mere third of the £156,500 men have saved.2 Factors such as the gender pay gap and women living 3.7 years longer than men, on average, are making it harder for women to build up a comfortable amount of retirement savings. However, there is another force at play...
According to the report, women taking time away from work or working part-time, generally to look after family, are the biggest drivers in the gender pensions gap.3 This so-called ‘motherhood penalty’ can have a huge impact on your pension prospects.
The problem is particularly evident in the new State Pension, despite the fact it has recently become equal for men and women. According to the ONS, the average age of first-time mothers is 28 (28.8 years to be exact!4), and many mothers this age will likely be on reduced pay for a number of years, and can therefore face a significant gap in National Insurance and state pension contributions.
LOOKING TO THE FUTURE
But all is not lost – there are steps you can take to mitigate the gap in pension wealth. The months of January, February and March are the perfect time to take stock and get a better picture of how much your retirement will cost. A financial adviser can help you better understand how much you need to save to bridge the gap between your income and your ideal retirement.
One thing is clear: saving for the future is one of the most important life choices a woman can make, and we need to start taking greater financial responsibility in order to ensure a secure future.
CONTACT ME TODAY
Wherever you are on your business journey, it is important that you’re getting the right advice on planning for a financially secure future. If you have a question about pensions or would like more information about my services, please contact me today – and I will also be at the next Women in Business Expo if you want to pop by for a chat!