Retirement Planning for Women: Are you at risk of running out of money?

When it comes to retirement planning, everyone’s situation is unique, and you need to consider what’s right for you and your family.

An article on the This is Money website says that half of women ‘expect to run out of money in retirement’. If you are one of the 61% of women worried about their pension, keep reading.

We've provided a quick checklist of things to consider when planning for retirement*.

*Please note that when it comes to retirement, Unity Mutual cannot provide financial advice. If you require support we always recommend speaking to a qualified independent financial advisor (fees may apply).

Why Women Are More Concerned About Their Pension Pot: The Gender Retirement Gap

With the cost of living, house prices and other factors, retirement planning is a common concern for many. But for women, the pressure can often feel even more daunting.

Here’s a list of reasons why that might be the case:

Feeling like they had more time
Not having the spare cash to save
Divorce
Lower salaries
Having children (being out of the workforce)
State pension age increasing
Increased life expectancy.

So, what can female savers do if they’re worried about their future pension pot?

Your Ideal Retirement Lifestyle: What do you need to budget for?

It may seem far off, but knowing how you want to spend your time is important for a comfortable retirement. It helps you maintain your health and achieve personal goals in later life. With this information you can determine the amount of retirement savings you might need.

Questions to ask yourself:

Do you have property? Where are you planning to live?
What leisure and travel activities are you planning?
Will you have any debt by the time you retire?
Are you planning to support any children or grandchildren?

Whilst it’s hard to anticipate, you’ll also need to consider how inflation and taxation might impact you and your investments.

Which is why at Unity Mutual we recommend speaking to an expert.

Why Partnering with a Financial Planner is Key to Successful Retirement Planning

An expert financial adviser can guide you through the many options available. They can work with you to understand your current financial situation, your ability to absorb financial risk in the short term and other factors that will impact your financial situation in retirement.

Financial advisors can be useful for women who are self-employed or on maternity leave and who may not be paying into a pension pot because of fluctuating finances. They can guide you in finding suitable pension plans, that offer more flexibility in contributions until your income becomes more stable.

To find expert financial advice, check out the Unbiased website, which offers a trusted and free matching service depending on your needs.

How to Track Down and Understand Your Existing Pensions

One of the biggest steps in retirement planning is understanding what pensions you already have in place. Over the last decade or so, workplace auto-enrol pensions have become compulsory, so it’s worth tracking down pensions you may have had at previous jobs.

If you have paid into pensions in previous roles and not sure how to go about reclaiming any money you’re owed, visit the government’s Pension Tracing Service. Once you have located all of your pensions, it might be worth speaking to a financial advisor about consolidating them, and potentially saving time and money (on management fees).

It’s also worth noting your existing pension type and how it may track over time.

There are two main types of work-based pensions:

Final salary scheme (less common): guarantees you a steady income from your old employer when you retire. The amount you’ll receive is based on how much you earned and how long you were part of the scheme.

Defined contribution pensions: takes payments from both employer and employee, investing them to provide a pot of money at retirement.

Some employers will provide access to a pension advisor through their scheme, so you can discuss whether it’s worth increasing your contribution to benefit from the maximum contributions your employer offers. They might also discuss where your pension fund is currently invested and if it’s worth changing your investment risk.

For example, someone in their 20s might be more comfortable with a higher-risk investment strategy since they have time to recover from any market downturns. On the other hand, someone nearing retirement is likely to prefer a more conservative approach to protect their savings

How personal savings can supplement your pension for a more comfortable retirement

‘Just one in five new retirees can afford to top up their state pension for a yearly income of £31,300, the amount needed for a 'moderate' lifestyle,’ according to the This is Money article.

We’ve focused on a few ways to ensure you’re prepared for retirement in the beginning of this article; but here are some more reminders of the things you can do to support a more comfortable lifestyle in retirement:

Start Early – the sooner you begin saving, the more time your money has to grow through compound interest
Maximise Employer Contributions – take full advantage of any employer who matches contributions to your workplace pension plan
Set Up a Private Pension – consider additional private pension plans, like a personal or self-invested personal pension (SIPP), to boost savings, especially if you’re freelance
Automate Savings - set up automatic transfers to your pension or savings account, to ensure consistent contributions
Increase Contributions Gradually – as your income rises, increase the percentage you contribute to your pension or savings account
Track and Adjust – regularly review your retirement plan and adjust contributions or investments based on your changing goals or financial situation

The importance of focusing on your pension can't be underestimated, as it forms the foundation of your long-term financial security and ensures a stable income throughout retirement.

Looking for more flexible savings alongside your retirement savings pot?

Unity Mutual offers a range of medium and long-term savings products, with tax-free benefits and bonuses, you can view our range of financial products here.

Have a question about any of our accounts? Do not hesitate to get in touch with our friendly team.

*Terms and conditions apply