Gemma Young APFS, Certs CII (MP & ER), Chartered Financial Planner of Queen Square Wealth Management considers the pension options for women in the workplace
Many of us are familiar with the ‘gender pay gap’, however, women in their forties will be one of the unfortunate victims of this inequality, which has meant for the longest time the majority of women have been unfairly compensated for their efforts when compared to men in the same roles and industry.
While this has the immediate impact of women taking home less money each month, the longer-term impact has meant that on average women in their sixties retire with pensions a third smaller than those of men according to the Pensions Policy Institute1. This is due to many people opting to pay a percentage of their wages via monthly contributions, as such women see less than men go into their pension each month, resulting in the majority of cases, a lower final figure upon retirement.
So, what can women who find themselves in this position do today so that their retirements are just as plentiful as their male counterparts.
Advice & Goals
As with many aspects of life, setting realistic and manageable goals are key to success. The best way to ensure that your goals are realistic and suitable for your circumstances is to get professional advice. A financial adviser is not exclusively for those with outlandish wealth, an adviser will be able to explain your options to you in a clear and concise way, which in turn will enable you to make an informed decision.
A study found that those who took financial advice were on average £47,000 better off than those who had not a decade later, those numbers alone are reason enough to at the very least have an initial discussion! (ILC, 20192)
Other Assets
A pension is not the be-all and end-all when it comes to retirement planning. Other assets such as property, land and chattels of significant value can also be factored into your retirement planning. The family home may one day be too big for just yourself and your partner and as such downsizing can realise capital which can be utilised upon retirement. A financial adviser will help you identify equity and funds which you could utilise upon retirement.
Small changes today, big impacts tomorrow
As Albert Einstein once said, “Compound interest is the eighth wonder of the world. He (or in this case she) who understands it, earns it, he who doesn’t, pays it.” Ensuring that you are putting away the most you can today is key. Increasing your pension contributions, even by what may seem like a small amount could have the potential to be game changing in 20 years’ time. As such, taking the time to look over your pension contributions alone or with an adviser could be the difference between retirement woes and retirement bliss.
If you would like to discuss your retirement concerns and goals with a financial adviser who understands the challenges women face financially, then please do get in touch today for a no obligation initial meeting.
The value of an investment with St James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.
1 Pensions Policy Institute (PPI), Understanding the Gender Pensions Gap, 2019
2 ILC, What it’s worth – Revisiting the value of financial advice, November 2019, based on 2014/2016 calculations. Receiving professional financial advice between 2001 and 2006 resulted in a total boost to wealth (in pensions and financial assets) of £47,706 in 2014/2016.
Gemma Young APFS, Certs CII (MP & ER) – Chartered Financial Planner
QUEENS SQUARE WEALTH MANAGEMENT LTD – Senior Partner Practice of St. James’s Place Wealth Management
T: 01225 742 644 | M: 07894 876784
A: 15 High Street, Corsham, Wiltshire, SN13 0ES
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Queens Square Wealth Management Ltd is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the group’s wealth management products and services, more details of which are set out on the group’s website www.sjp.co.uk/products.
The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.