The health, wealth and longevity conundrum and how women can rise to the challenge  

Article by Sharon Bonfield, Commercial Research Specialist, St James’s Place Wealth Management (https://www.sjp.co.uk/)  

7 Ways to get ahead on your retirement plan (F)Women typically live longer than men and may have a smaller pension pot, therefore in order to make our money last, we must plan accordingly.

While longevity sounds like a blessing, we wouldn’t want to be unwell and struggling financially during our later-life years or become a burden on our children who we had prioritised earlier in our lives. But many of us run the risk that this will be our future.

A 40-year-old woman has a one in four chance of living to age 96, and a one in ten chance of living to 100. Better healthcare and positive lifestyle changes have helped to raise life expectancies across the board, but as women we are still likely to live longer than men. And with several studies finding that more men than women have died from COVID-19, the life expectancy gap could widen further from here.

Financial pressure 

With this in mind, we not only need our pensions to last longer, we also generally have smaller pension pots which is a bad combination. We already know that women typically retire with one-fifth of the pension wealth of men. New analysis from the Centre for Economics and Business Research found that, when life expectancy is taken into account, the gender pensions gap could be as much as £108,130 for single women, and £186,120 for women who are married or in a relationship.

Because we tend to live longer, women are also more likely to end up in single-person households later in life. This could add further to our financial pressures because it can be much more expensive to run a household of one, covering all bills alone.

Will you be able to work into your 70s? 

Adding to this, the State Pension age is rising, which means many people who will rely on this government payment will have to work longer before they can claim it. With this, there’s no guarantee your health will support you working into your later years.

For example, some women may have taken their first job at 16. If you’re planning on working until your late 60s or early 70s, that’s a lot of years in the workforce – you might well be feeling burnt out or struggling with health issues. As early as your mid-40s or early 50s, you could be suffering from symptoms of the menopause, such as ‘brain fog’, which can make it tough for some women to continue working at the pace they once did.

You may want to drop to part-time hours or get a job with less responsibility to take some of the pressure off, even if it is just for a few years. But will you be able to afford this flexibility?

Triple whammy for same-sex couples   

For women in same-sex relationships, you may think that your joint longevity will give you a long and happy retirement together. But in fact, you could actually face a triple whammy of challenges. For example, if you both take a period of maternity leave, this could impact your earning power and pension contributions. You both may actually need to work longer and face the risk of health conditions spread over a longer length of time.

Luckily, there are things that we can all do to increase our chances of a financially secure life, however long you live. If you do nothing else, have a think about what you want your future to look like. Do an appraisal of all your long-term savings plans, rounding up any small -pension or savings pots you may have forgotten about over time. Sit down and have a chat with a regulated financial adviser to see how things are actually looking for your retirement years. Taking into account the money you’ve already saved and your capacity to save over the coming years – an adviser can model a likely outcome.

For more information or advice on planning retirement, please visit https://www.sjp.co.uk/products-and-services/retirement


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