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Women more concerned about retirement finances than men

5 minute read

Since Pension Buddy was launched, many people have taken advantage of the opportunity to create a free personalised Pension Buddy Plan.

This has given us a number of insights into the biggest retirement questions and concerns on people’s minds. It’s also helped us see how these differ between men and women.

On track for a comfortable retirement?

One of the most striking differences between the genders is the level of optimism and confidence in retirement finances. Overall, less than half of people (46.9%) who created a Pension Buddy Plan felt they were ‘on track for a comfortable retirement’.

That’s obviously not great. But when the data’s broken down by gender, the situation looks even worse for women. They were way more likely to be worried about their later life financial status, with only 34.2% of women saying they’re on track for a comfortable retirement compared to 55.4% of men.

Retiring earlier than expected

Drilling deeper into the data, there was also a marked difference between the genders when it came to retiring earlier than expected.

Although there was no significant difference in overall numbers (9.9% of men said they’d had to retire early, compared with 17.1% of women), there was a material difference in age.

Indeed, the average age of the women who said they’d left the workforce earlier than expected was 54.4 - just under two-and-a-half years younger than men in the same category.

Other sources of income in retirement

Another way of gauging whether people feel they have enough money in their pension pots is their level of interest in ‘other sources of income in retirement’. And, again, there’s a major difference when this is broken down by gender.

When asked whether they wanted to find out more about other sources of income in retirement, significantly more women (75.8%) than men (63.3%) expressed an interest. This is another clear sign that women are more anxious about retirement.

So why are women more concerned about future financial security?

This can be attributed to a number of different things. Career breaks for maternity leave, more caring responsibilities falling on women, the gender pay gap, and more women than men working part-time in the UK. All of these issues mean that many women find themselves with smaller pension pots than many men at the end of their working lives.

Official statistics reflect these differences between income for men and women, and the resulting retirement fund discrepancies. According to UK government figures released in a research briefing paper on women and the economy in March 2023, 38% of women work part-time, compared to 14% of men.

The paper reported that the April 2022 ONS Annual Survey of Hours and Earnings found that median weekly pay for female full-time employees was £584, while for males it was £683.

In particular, the paper cited gender pay gap factors that tend to become more evident for women in their 30s and 40s, such as taking time out of the labour market to care for children, or older relatives.

Challenges women face

Sara, 48, decided to work part-time after her son was born 17 years ago and says it has “subsequently been almost impossible to get back to full-time work” with her employer. She had two pensions from previous employers, which she has rolled into the one fund, but says the pension pot is “peanuts.”

“As I get nearer to 50, I am more and more worried about how it’s going to pan out,” continues Sara. “I expect any inheritance I might get will be spent on my mum’s later-life care.”

The issues of being self-employed or freelance

For many self-employed people, sporadic income can affect the ability to build up a solid pension pot for retirement.

“I spent 20 years self-employed and made no pension provision,” says Asma, 45. “Now I’m on a civil service pension scheme, but I’m worried it won’t be enough to support me in retirement.”

Like many for whom early retirement is not a feasible option, Asma says she expects to “just work until I can’t anymore.”

Finding money from other sources

Reflecting the interest shown by women in looking into alternative sources of income for retirement, Jaime, 44, is looking to rely on an increase in property prices.

“Our home has gone up in value significantly, so we’ll focus on paying off the mortgage, downsizing at the right time, and trying to invest any profit from the house sale into a passive income stream.”

So what can you do if you’re one of the many people concerned about retirement finances?

If you’re in your late 40s or early 50s, there’s still plenty of time to make a positive difference before you reach retirement age.

For 61% of Pension Buddy users, simply finding out how much money is needed for a comfortable retirement is the starting point for pension planning. Furthermore, 58.8% asked the question “Will I have enough money to retire?” and 40.8% would like to know how much they should be paying into their pension to meet their long-term financial goals.

But perhaps the best place to start – if you haven’t done so already – is to join the many clever people who’ve created a free personalised Pension Buddy Plan. This is an easy way of getting to grips with the key things to know about retirement planning, which will help you start feeling more confident about your financial future straight away.

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