Seven Steps To Help Women Avoid Retirement Saving Regrets

International Women’s Day is with us again and no sector needs to embrace it more than the financial sector.

Investment platform, 7IM, recently reported that 38% of female retirees had regrets regarding their retirement saving decisions, compared with 26% of their male counterparts.

Pensions are the key savings vehicle for retirement and research from Aviva has demonstrated that nearly half of over-50’s regret not saving into their pension sooner.
The gender differential 7IM described is not surprising given what we know about the gender pension gap, with Now Pensions reporting women having up to 72% lower pension income than men. The Department of Work and Pensions is currently working to more accurately measure and reduce this gap, as it remains a considerable issue.

There are many reasons why there is a gender pension gap, including the slowly reducing but still enduring gender pay gap, the so-called glass ceiling hindering women rising up the executive ranks and women still being statistically more likely to take family-related breaks, impacting their careers when they return to work.


Avoiding retirement regrets

Avoiding personal regrets about planning for our retirement however is very much within our control and it does not need to be complicated.

Here are seven straightforward actions to help women avoid later-life retirement regrets:

1. If you are employed, ensure you’re enrolled in your workplace pension and receive the maximum employer pension contributions.

2. Engage with investing. By this I don’t mean get involved with speculative share dealing. Investing for retirement often starts when we are young and a great investment journey will require some self-education on your behalf. Understanding what pensions are, their tax benefits and how to invest for the long-term is a great start and your workplace pension provider is a good source for educational content.

3. Start saving and investing as early as possible, even if it is only small amounts. The pounds and pence we invest when we are young can achieve powerful growth over many decades.

4. If there is an intention to take a career break at any stage, plan ahead financially and where possible, prioritise your retirement savings so that they have longer to grow.

5. If you are in a relationship, it is sensible to view your day-to-day finances jointly. However as 42% of UK marriages end in divorce, this is a key cause of subsequent financial vulnerability so it is very important that you don’t neglect your individual financial security.

6. The State Pension is an important part of an overall retirement plan and obtaining forecasts through the government gateway will allow you to see gaps in your contribution record. Making voluntary contributions or claiming for years when you are bringing up children will allow you to keep your contributions up to date, even when you are not working.

7. Create a financial plan to work towards. The plan may include when you hope to retire, what you want life to look like in retirement and how much money you may need to achieve this. Make sure you also factor in those major financial goals such as helping children with house deposits, paying for weddings or funding holidays.

A financial plan can start fairly simply, getting more complex as you get older and have more assets. You may start by creating a plan for yourself, however as you become more focused on retirement, making the best decisions may require the help of a financial planner.

If you feel a female financial planner would understand you better, ask for one.

International Women’s Day is all about recognising challenges and looking for solutions to the gender equality issue and the best place to start is with what is in our own control. Whilst systemic issues still prevail, let’s ensure that as women, we are doing everything in our own power to help close the gender pension gap and avoid regretting our retirement saving decisions, or lack of them, later down the line.