Financial Planning Week gives everyone an opportunity to start focusing on how they'll plan for the future, and working out how you'll secure a retirement income will be one of the most important considerations of all. However, not everyone is as up to speed as they should be – women are falling woefully behind in their pension planning, so now's the time to take action.
Research from Aegon UK has revealed that there's still a significant gender divide when it comes to financial planning for the future, with its latest Readiness Report showing that women are falling behind in both keeping track of, and contributing to, their pension savings.
The figures show that women contribute less than half (45%) of the amount that men do, stashing away just £125 per month compared with men's £276, while 55% of women surveyed make no regular contributions to their pension pot – a figure that falls to 40% among men. Furthermore, 45% of women have no pension savings whatsoever (compared with 28% of men), something that desperately needs to change if women are going to be properly prepared for retirement.
The survey also highlighted a worrying knowledge gap among women, with a large proportion not keeping on top of their pension savings. The figures show that just 16% of women have checked the performance of their retirement savings in the past six months, while 63% have never checked, meaning large numbers of women could be disappointed.
Staying on top of your pension savings is the only way to know you're on the right track, and unless you regularly review the performance of your investments, you won't know if you need to make any alterations to your savings habits. Unfortunately, 60% of women have never done anything to review or affect their plans for retirement, compared with 39% of men, and that could put their future financial security in jeopardy.
Don't think that you'll be able to wholly rely on the state, either. The current basic state pension is just £113.10 per week – a fact that 73% of women were unaware of – which probably won't be enough to deliver the kind of retirement lifestyle you're hoping for. Currently just 39% of women will rely on a private pension as their main source of income, but given that the state pension is so low, this is a figure that needs to rise.
"Financial Planning Week is a good opportunity to take stock of finances and create a plan of action," said David Macmillan, managing director at Aegon. "The results of [our] latest Readiness Report show there is still a significant gender divide in how ready we are for retirement, and this really needs to be addressed."
However, it isn't something that can be facilitated overnight, as the research found that there were still significant barriers to women saving for retirement – and a large part of it comes down to the responsibilities of family life. Women will often take time out of work to raise a family, and some will only work part-time in an effort to balance work and family commitments, resulting in lower salaries and less opportunity to access workplace pensions.
But, there are still things that can be done, as David adds: "Although it's quite a step to try and change the work-life balance of a nation, we can at least find ways to help make financial planning as quick and efficient as possible. Online services are a great way of doing this, but at the moment they're underused; for instance, just 7% of women currently use online services to track their pension, which is incredibly low considering 84% use online services to track their current account.
"Our hope is that women take some time during Financial Planning Week to look at their pension, and that this helps us continue towards getting the UK ready for retirement."
The key is to be proactive. Have a plan of the type of retirement lifestyle you want and the income you'll need to achieve it, and then you can work out the steps you'll need to take to get there. It could be something as simple as getting into the habit of saving regularly – make sure to utilise cash ISAs as well as workplace pensions – and if you regularly review the performance of your savings, you could be one step closer to achieving your goals
5 reasons why you need a workplace pension
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.