A recent survey carried out by Scottish Widows has found that many women are not saving enough for their pensions and consequently face an uncertain future when they reach retirement age.
Many women do not have an unbroken employment record and this has affected their pension saving. Even women in full time employment are not saving adequately for their pensions compared with men in the same position, and many women who are self-employed or in part time work have made no provision at all for their retirement.
The truth is that although women will spend longer in retirement than men, many will be forced into a difficult financial situation in old age. Today, 2/3 of pensioners living in poverty are women.
On average, women lag behind men when it comes to saving for a pension, and among working women aged between 50 and 59 who are already contributing to a pension fund, the average sized pension pot is around £37,000 compared to the £54,000 saved by men. Even more worryingly, it is this group who have been hit the hardest by the recession with many women no longer having the money to save. Job losses and cutbacks have resulted in pension saving among women being in decline
Many women in their 40s, 50s and 60s are becoming increasingly worried about their lack of adequate pension saving and worry that it is too late to start. The good news is that it is not too late if you act quickly.
If you are working, even on a part time basis, you may be able to save for your retirement through a company pension plan. If you are self-employed or there is not an available company pension scheme in your workplace, starting a private pension fund would be a sensible option.
If you are running out of time there are pension plans available that offer a better return by higher risk investments. Don’t forget there are tax advantages to setting up a private pension scheme as well.
So is it all doom and gloom for women as they reach retirement age? For many women it could be improved, but you may be better off than you think.
If you have a pension pot already, why not contact an independent financial adviser to find the best way to make your fund work for you. If you are considering an annuity, you may wish to think about deferring this until later while you build up your fund with investment.
If you are thinking about starting saving for your pension but worry that you have left it too late, find out about the options you have available and start planning for your future today. You may be better off than you think.