Women over 50 risk losing out on over £50,000 in retirement
There are many reasons for the pensions gap, including that women are still paid less and are less likely to be in senior leadership positions, resulting in lower pay and lower pension contributions. Research revealed that without a proper plan in place, women risk losing out on over £50,000 in their retirement.
As Internation Women’s Day arrives, women are warned of their potential loss in retirement. By taking control of their finances, individuals can make a big difference.
Research from Fidelity International highlighted the gap in levels of wealth held by both men and women when it comes to retirement savings.
Men over 55 estimate they have £118,850 in pension savings vs. £68,310 held by women over 55. This is a difference of £50,540.
This initial gap in pension savings starts at 16 percent, but can double by the time women reach their 40s.
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By the time they’re in their fifties, it could be 51 percent and finally, when they reach retirement their pension savings could be 55 percent smaller on average.
Men aged over 50 have nearly twice as much saved in their pension pots as women, setting themselves up for a much more comfortable retirement.
Emma-Lou Montgomery, associate director, personal investing at Fidelity International told Express.co.uk: “The cost-of-living crisis is challenging all of us. But it’s women who continue to be most significantly impacted.
“In the past 12 months, many women have felt they have little choice but to cut the amount they’re saving towards their future.
“Yet these are women who are already at increased risk of not having enough to live off in retirement, exactly because they are women and face the challenges and barriers that blight so many women’s financial futures.
“When it comes to pension savings, the knock-on and potentially long-term effect of the cost-of-living crisis is very concerning.
“For women especially, it’s important that we don’t let today’s worries further damage our longer-term financial wealth.
“It doesn’t necessarily need sacrifice, just dedication. The power of small changes can’t be underestimated, with small and regular contributions into a savings pot building nicely over time.”
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She explained their research show signs of positive change. In the past year, the number of women who feel financially independent has risen (up from 45 percent to 51 percent).
Whether through choice or necessity, women are increasingly engaged with their money.
Ms Montgomery added: “Staying on top of your longer-term savings is the key to both financial independence and that all-important confidence.
“Because, when the outlook remains uncertain it’s more important than ever that we feel in control of our finances.”
The gender pension gap is a challenge for the whole of society. While many factors are outside of people’s control, there are steps that they personally can take to try and push back against it.
On their website, Fidelity International shared some tips to help people become better informed.
People can use a retirement income calculator to see how much money they will get when they retire, and make sure they’re saving the right amount ahead of that.
Pre-empting the pension gap is often seen as a good decision. People can contribute as much as possible to their pension, and the best way to do so without creating a financial burden, is starting early. Britons are urged to be aware of any potential future career breaks and gaps in their pension and think about how they can make extra contributions to minimise the effects later on.
People could also benefit by speaking to their employer, and asking questions. Is it possible to increase the level of contributions? Are people taking advantage of all the money their company will contribute? Are they able to make one-off contributions to make up any shortfall? Individuals will be able to find some of this information from their employers.
For more help or information, Britons are encouraged to make use of free support like the MoneyHelper or Retirement Living Standards websites.
It can be helpful if people keep a regular eye ont their pension to make sure they’re in full control of it and saving for their ideal future.
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