Did you know that, on average, women need to work an extra 19 years to retire with the same amount of pension savings as men?
The research, carried out by the Pensions Policy Institute, found career breaks due to childcare and other factors leads to an average ten-year career gap for women. And this amounts to an average of £39,000 in lost pension savings.
Perhaps more shockingly, to close this gap a girl would need to start saving for retirement at just three years old. Or, if we think about it in terms of the current state pension age of 66, a woman would need to work until age 85.
It’s unfair and it’s time for change.
As a woman who works in finance – and a mother of three daughters – this isn’t the sort of research I want to see. It’s time for us women to take control of our financial futures, which is why I’m using this year’s International Women’s Day to urge women to act.
It could really pay off to know what your finances look like and whether you’re on track for future goals like the retirement you dream of. So here are a few of my top tips to help you get started.
1. Know where you are with your money
My first tip is simple: do something now.
This is especially true if you’re a woman who may be at risk of having less in your pension due to time away from work. If you need to increase your contributions to combat those gaps in earnings, looking at putting a plan in action now could make all the difference later.
A good place to start is by getting hold of a statement from your provider. From this you can find out how much you’re paying in and the total you’ve built up so far. If you’ve changed jobs over your career, you might have old pension pots too. These could play an important role in your future.
It might take a bit of digging, but getting hold of all this key information will give you a better idea of what you’re on course to have.
2. It really is worth paying into a pension
There are some excellent tax incentives for paying more into a pension.
Unless you work in the public sector, you’re likely to have what’s called a defined contribution pension. Just by simply paying money into this kind of pension, you should see its overall value grow over the long-term.
The biggest reason for this is due to something called tax relief. On every contribution you make, you get 20% extra added by the government to your pension as a minimum. If you’re a higher or additional rate taxpayer, you can claim even more through self-assessment.
Plus, if you have a workplace pension, your employer is likely to pay into your pension too – further boosting your retirement pot. Quite simply, a pension is a fantastic product that could make such a difference to your future – offering you greater financial security.
3. If you’re unsure about anything, just ask
As with many things in life, knowledge is power.
It’s very much about educating yourself and knowing who you can turn to for advice. Once you begin to understand your options, you should start to feel more confident.
As someone who has been on maternity leave and returned to work, I know first-hand that plucking up the courage to find answers to our money questions helps us to feel better and more in control.
After all, you don’t know what you don’t know.
Here are a few examples of questions you might want to ask about your finances:
- Should I pay off debt or save first?
- How much should I be saving?
- Am I on track to reach my goals?
- Is my pension set up in a way that’s right for me?
- How much can I pay into my pension each year?
At this point you might be thinking, who do I ask these questions to? And this leads me nicely to my final tip.
4. Come and speak to us
I recently spoke to all sorts of people in different situations at a Women in Finance event. And what I saw is that people found it incredibly beneficial to simply talk about their situation, discuss their finances and ask questions.
The great thing is, here at Skipton Building Society, we can help you to do this.
A good way to start is with a FREE My Money Review appointment – a relaxed conversation with one of our experienced colleagues. It takes around an hour, and we can use this time to find out about you, your savings and your plans - including if we could help you make more of your money.
I can personally vouch for this process.
I remember that feeling when I returned from maternity leave. It felt like there was so much going on – getting back into the swing of things and juggling childcare arrangements. Thinking about my finances wasn’t exactly at the top of my list, but I wanted to find out more about my options.
I decided to have a My Money Review appointment to see where I was at, and after it I can safely say I began to feel a lot better about my situation.
After the chat there’s no pressure for you to do anything and we’ll take everything at your pace. You can even book another appointment if you want to speak to us again. We could also arrange for you to speak to one of our financial advisers to further discuss things like your pension.
So why not do something great for yourself this International Women’s Day and take those first steps by booking a FREE My Money Review appointment? There’s nothing for you to lose – you might find you’re in a position where you’re doing everything you can, which is great. Or you might find out you could be doing a little bit more for you and your future.