1. Career ahead
How can I maintain and boost my earning power?
Women in their 40s and 50s face a double whammy of reduced earning power: first (for some, not all) motherhood, then menopause. There’s also the added complexity of caring for ageing parents or other relatives.
How can I balance my career with my family commitments?
The emotional and physical stresses facing ‘sandwich generation’ women can influence their employment choices. One study found that 23% of women aged between 40 and 60 had considered resigning from work due to the impact of the menopause.
What is the impact of career breaks?
Whether you take a career break or cut your hours, any loss of income can have a long-term effect on pension contributions and future entitlements, potentially reducing your financial security and independence in later years.
2. Mind the gap: how can I boost my retirement savings?
It’s never too late to save for your retirement. There’s still time to build up your pension pot in your 40s and 50s.
Relying just on your State Pension could result in hardship after you hit retirement age – especially if there are gaps in your National Insurance (NI) contributions due to career breaks or part-time working.
How much do I need to save?
Experts estimate that a single person needs £13,400 a year to maintain a minimum living standard during retirement. A full state pension currently works out at just under £12,000.
To enjoy a comfortable retirement, which could include expenses such as private health procedures or home alterations, you will need a lot more: £43,900 for a single person or £60,600 for a couple.
Will a private pension plug the gap?
Although private pensions can help plug the gap, women’s pension pots are often smaller than men’s. And the pension contribution gap increases the closer you get to retirement. For women aged 40 to 44, it’s 25%. By the time you reach 50, it’s risen to 32%.
Practical steps to consider
- Create a cashflow model with your Finli planner to understand how much money you need to meet your retirement goals
- Check NI contribution gaps and the impact on future State Pension payments
- Evaluate performance of existing pension funds and consolidate into a single pot to improve visibility.
3. Go it alone: how can I become more financially independent?
Life doesn’t always go as planned. To give you more security and flexibility, it’s a good idea to evaluate your personal wealth and make sure you have sufficient funds to go it alone if needed.
What happens if I get divorced?
Coping with relationship breakdowns and partner bereavements can be much harder if you don’t have a financial cushion to fall back on.
Around half of divorces involve women who were financially reliant on their husbands during their marriage. This might explain why some women see their income cut in half in the year following a divorce with 24% struggling financially compared to just 16% of men.
How can I achieve financial security?
One in three divorces occur after the age of 50 so it’s important to consider how any relationship changes might impact your retirement plans and funds before you agree a settlement.
During divorce, women are more likely to waive their rights to a partner’s pension although they are entitled to a portion of their husband’s private pension wealth.
A finance health check is advisable before starting divorce proceedings.
Join the women seizing the financial initiative
Many women are already taking steps to secure their financial future: 74% say they are seeking advice exclusively for themselves compared to 65% of men.
Greater knowledge empowers women to better manage their personal finances to achieve their personal goals. Talk to your Finli planner today about what steps could help you stay on track – and in control.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.