I was reading recently that women only save a third of the amount that men do by the time they approach retirement. This worrying statistic is primarily due to time taken out of their careers to look after a family but also due to the fact that there is a gender pay gap, with women earning around 18% less than men on average.
Childcare costs also fall disproportionately on women and the fact that women tend to live longer than men also makes it harder for them to build up a comfortable amount of savings to last them the rest of their lives. The Women’s Rights Organisation, The Fawcett Society has quoted that “The shocking pensions gap that women experience is a result of a lifetime of income and workplace inequality.”
An unfair system: Being less likely to take career breaks during their working life, men have an unfair advantage when it comes to saving for retirement. Typically, in a family setting, the woman would take a career break to look after the children, whilst the man soldiers on, building their pension fund without any gaps. The end result is a pensions gap which them puts the woman at a disadvantage and in a position where she could end up being reliant on her husband in retirement.
Amy from Dulwich says: “When I took a career break to have my children, I realised that I was falling behind in my pension contributions but had no idea what to do about it. In the end, with the myriad of things to consider in raising a young family, I stopped thinking about it. Let’s just say, life got in the way.”
One thing at a time: We all know that in order to build a retirement fund, one needs to start saving from as young an age as possible. This is not always easy. Many come out of university in debt and concentrate first on clearing their student loans. Next comes finding a place to live; and with rent being so high, the natural next step of purchasing a house becomes a huge and all-encompassing challenge.
Helen, a travel consultant from Penge summarises it nicely. “I found it difficult because I came out of university with quite a lot of debt. When I eventually got rid of that, my focus was on buying a house. Once I achieved that and had children, I had to put my own requirements on hold. Before I knew it I was in my forties and still hadn’t made any significant retirement provision. I had no idea what to do about the problem. In those circumstances, the easiest thing to do is nothing”
The solution: Having no idea how to fix a problem can be extremely disheartening and as Helen above says, doing nothing can easily become the default position. This is where financial advice comes in. This is where paying for an hour with a qualified financial adviser could be good investment
Simply put, your adviser should be able to clearly explain to you where you are now and where you need to be. They should be able to put a plan in place to help you achieve your retirement goals; taking things into consideration like your career prospects, family commitments and budget.
As Amy says, life gets in the way and it’s easy to do nothing. Knowing that one needs to do something is perhaps one step. Knowing exactly what to do and doing it is quite another.