Women plan less for retirement – here’s how you can help
The power of pension planning is a key point from Standard Life’s Retirement Voice 2022 report, which asked almost 6,000 people from across the UK how they think and feel about retirement.
The research painted a clear picture that those who spend time planning will feel better about their finances and enjoy a better retirement.
And yet a staggering 72% of people say they do little or no planning for retirement. For women, that figure is even higher at 79%.
Fewer women than men plan
The report revealed several worrying insights into women’s retirement planning:
- Fewer women are putting ‘a great deal of thinking’ into their retirement planning, compared with the previous year. Just 21% say they plan a lot, down from 23% in 2021.
- Women are almost twice as likely as men to put no planning into their retirement (19% vs 35%).
- In general, women do less planning for retirement than men – and the gap has risen from 9% in 2021 to 16% in 2022.
Following International Women's Day, it’s time to put the spotlight on why pension planning is important and the positive impact it can have on women’s overall financial wellbeing. Here are some examples of the benefits that planning can bring and what you could do to help female pension scheme members spend more time planning for their financial future.
Planning helps improve women’s retirements
Planning plays a significant part in how long women think they can support their ideal lifestyle in retirement.
Women who plan expect they’ll be able to fund their retirement for 22 years. But for those who do no planning at all, that number drops to just 9 years.
This shows that the link between planning and good retirement outcomes is strong, with female planners predicting they’ll be able to fund an extra 13 years of retirement than non-planners.
A good way to help your female members engage more with their financial planning is to make the process as accessible as possible. Offer a variety of educational content, such as videos, interactive tools, bite-sized guides and FAQs so that members can choose what works best for them.
Boosting financial positivity
The rising cost of living appears to be having a bigger impact on women than men. Indeed, women’s financial positivity has dropped from 44% in 2021 to 33% in 2022. This is a much steeper decline than for men, whose financial positivity has slid from 54% to 50%.
Fortunately, positivity levels rise to 40% for women who spend time planning, although it’s still below that of men. In addition, female planners worry less about saving enough for when they’re older (63% planners vs 73% non-planners) and spending too much now in case they run out of money in future (63% planners vs 69% non-planners).
They’re also more comfortable with the amount of savings they have (35% planners vs 17% non-planners) and happier to take more risks with their money for the chance of higher returns (31% planners vs 20% non-planners).
It’s clear planning both elevates women’s financial positivity and softens the blow of money worries.
Making it easier for your female members to get a holistic view of their finances could be a good way to encourage them to plan for today and for their retirement.
Standard Life’s Money Mindset open-finance tool, for example, displays various financial accounts – such as bank accounts, savings and pension plans – in one, central, place. Seeing a snapshot of their overall finances could make it easier for members to see what savings they have and what income they could get in retirement.
Not only that, members can get personalised tips to help them make small changes to their spending and saving, which could help improve their long-term financial wellbeing.
The importance of financial confidence
A drop in financial confidence and knowledge is another casualty of the economic crisis. Just 43% of women say they understand financial products, down from 50% in 2021. And only 52% say they feel confident making financial decisions, down from 57%.
Yet again, planning offers some respite, with financial product knowledge and financial confidence rising to 52% and 58% respectively for female planners.
Again, you can help support women in their pension planning through tailored and targeted content that’s engaging and easy to digest. In addition, you can help break down barriers to financial understanding and confidence by encouraging open conversations with your female members.
Of course, much more needs to be done to help improve women’s retirement incomes. Phoenix Insights’ Caught in a Gap report (2022), produced in partnership with the Institute of Employment Studies, outlines the barriers that women face as a result of the gender pension gap and how employers can help close it. Supporting women in their pension planning is just one of many ways that you can make a big difference to their financial future.
In partnership with Standard Life
Standard Life are part of Phoenix Group, the UK’s largest long-term savings and retirement business. We both share an aligned ambition to help every customer enjoy a life full of possibilities.