Over 1/4 Women Not Saving Sufficiently for Retirement
Women are not saving sufficiently to support themselves in retirement, worrying new figures reveal.
A whopping 27% of the 2,000 British women surveyed by Fidelity International confessed they have not stashed enough away, despite many expecting to need their pension to financially support them for at least 21 years.
With life expectancy for women today reaching an average of 82.3 years in the UK, and over a quarter of newborn baby girls predicted to live until at least 100 years old, there is a pressing need to ensure women are suitably prepared to support themselves in a long retirement.
Yet 21% have not considered their life expectancy at all when calculating the amount, they need to save for retirement. And a further 25% are yet to even calculate how much they will need to retire comfortably.
Emma-Lou Montgomery, associate director for Fidelity International, said: “The hard truth is that most women just aren’t saving enough for the length of their retirement years. We need to be thinking early on about how much we need, and how much should be saved to safeguard our future. Regardless of what your goal retirement looks like, when the time comes to stop working, we need to know that our money will last if we need it to.
“For women taking career breaks it’s important to think about how this time off might impact your pension pot. Saving a bit extra each month will help you to safeguard your future.
“While it can be tempting to assume you will be able to rely on your partner’s pension in retirement, making sure you can support yourself alone will protect you against any nasty surprises. What’s more, saving into your pension early will leave you with more options at retirement and provide you with the resources to lead a more fulfilling and comfortable life later.”
With the state pension age increasing to 66 years old from 2020, women’s pensions have been at the forefront of the news agenda as many have been hit by the changes and are now concerned there is not enough time to ‘re-plan’ their retirement.
Women face a substantial gender pension gap despite, due to life expectancies, often needing their pension to last for longer. Indeed, research by the Pensions Policy Institute found that women in their 60s have an average private pension pot of £51,100 compared to men of the same age, who have an average of £156,500 – a staggering £100K more.
Fidelity’s research found that women between the ages of 35 and 65 were more likely to be unprepared for retirement. It also found that 32% of those aged between 55-64 years old said they did not think they would be able to finance a comfortable retirement by themselves. In fact, 15% of women aged 55-64 years old said they would need to rely on their partner’s pension in retirement.
However, careful planning and saving early can help women to set enough money aside to retire comfortably. Fidelity’s Retirement Savings Guidelines recommend that women who have taken a career break should save an extra 64p a day into their pension in order to bridge the gap when they return to work.
