Financial planning for women- things to know

Considering your financial position is always an important exercise, but if you’re a woman there are likely to be some factors which may be more relevant. Understanding where the pinch points are, and how to plan for them, can help you make sure that your financial situation isn’t compromised.

What are the differences between financial planning for women and men?

Some financial issues, such as estate planning or saving tax, affect everyone but others are more relevant at particular milestones or because of other reasons. For women, there are a number of key issues which tend to be more significant including:

  • Longer lifespans and retirements
  • Pension gaps
  • Career breaks
  • Pay inequality

Longer life expectancies

It’s well known that women live longer, so naturally their retirements are longer too. With this in mind it’s vital to put in place a sensible financial planning strategy, early on, to make sure that there is enough of a pension pot to pay for the years ahead. However, it can generally be harder for women to save for the long term and retirement. This can be as a result of a number of factors including career breaks and pay inequality which can all impact the ability to save into pensions and investments.

Interrupted work lives

Women are more likely than men to experience a break in their working lives – either to raise a family or care for elderly relatives. Regardless of the reasons for a career break, taking time away from the workplace can result in a woman having to pause any pension or investment payments resulting in reduced financial security, and an even bigger gap in the retirement pot.

Earning potential

Taking time out from a job could also have a detrimental effect on career progression, and the ability to command a higher salary in years to come too. Women are particularly more likely to take on part-time, or lower paid roles, in order to manage home and care commitments. The upshot of this is a significant gap when comparing the pensions of men and women. Research suggests that this UK gender pensions gap is as high as 57%, depending on age and location.

Financial planning and investing for women from Progeny

If you are a woman, it’s important to consider your financial position as early as you can, and work with a trusted adviser who can help you plan for different life stages. You may be able to pay more into your pension in the early years of your career, giving longer for compound growth and interest to play their part.

It’s also important to take your pension and investments into consideration if and when you have a family – it might be useful to discuss with your partner whether they can help with your contributions if you both choose that you’ll be the one taking a career break or opting for a part-time role.

We can help you evaluate your plans and put in place the right financial strategy for you. To discuss your personal circumstances please get in touch with your nearest office.

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