23 May 2019
- Women expect to have £168,006 when they retire, almost £100,000 less than men
- Women save 9.4% of their net income whilst men save 11.4%
- Only 22% of women think they are saving enough compared to 33% of men
According to figures from Brewin Dolphin, one of the UK’s leading investment management and financial planning firms, women are saving less than men for their retirement with only 15% saving for the future compared to 20% of men.
The previously unpublished figures from the Brewin Dolphin Family Wealth Report show that women are worried they will not have enough in their pension pot in time for their retirement, with 25% saying this is because they didn’t start saving for their retirement early enough. When it comes to how much they think they will hold when they reach retirement age, women anticipate they will have £168,006. This is almost £100,000 less than men who think they will have £255,328.
In addition, only 22% of women believe they are saving enough to ensure a comfortable standard of living for the future, compared to 33% of men. Data show that women are saving less of their net income each month than men with women putting aside 9.4% of their net income compared to the 11.4% saved by men.
Brewin Dolphin’s Family Wealth Report reveals that more men have plans for their retirement pot than women, with 38% of women claiming that they don’t know what to do with their pension when they retire compared to 32% of men. Whilst 21% of men said they planned to withdraw it as a lump sum, only 13% of women said they planned to do the same. Further, 21% of females said they would be relying on a state pension in their retirement compared to just 13% of men.
Wayne Berry, Investment Manager at Brewin Dolphin in London, says: “Whilst our research shows that women are not putting aside as much as men, either for their future or their retirement, we can also see that they are not as confident when thinking
about what they want to do with their pension pots. However, it is easy to get sucked into stereotypes about the differences between men and women when investing. We know that attitudes to finance are driven as much by social and demographic factors like education, employment status and financial circumstances as they are by gender. We know, too, that many more women are primary carers with part-time roles and less income to invest.”
Berry says that rather than focusing on the differences between men and women, it is more important to assess what the two sexes can learn from each other to help them become more successful investors. “Speaking very generally, men tend to be more confident than women which can lead to over-confidence, whilst women might be more risk averse which can lead to them becoming overly timid investors,” he adds.
The latest figures from the HM Revenue and Customs1 show that whilst the gender split of numbers of ISA subscribers is broadly equal, males accounted for a marginally higher proportion of the higher value ISA holders. Indeed, males accounted for 52% of ISA holdings worth £50,000 or more whilst 52% of females own holdings worth up to £2,499. Interestingly, data from Brewin Dolphin’s Family Wealth Report show that 45% of women say that having no spare money to save is preventing them from putting money aside compared with just 39% of men.
Berry says that whilst figures show women are investing less than their male counterparts, everyone, regardless of gender, should be aiming to save more for their future. “Our financial planning team works with all our clients to encourage them to set aside money for the future and this really doesn’t have to be a lot. There are simple steps people can take to maximise what they have. For example, we encourage our clients to pay off any credit cards and unsecured loans and to put aside spare cash to build up liquid assets whilst making the most of tax-free allowances such as ISAs.”
He adds: “The aim should be to build up enough cash to cover six months of essential expenditure. Investing additional money in the stock markets to beat inflation is also worthwhile. There are many cost-effective online services, such as our Brewin Portfolio Service2, which allow people to invest smaller sums for those that don’t yet need to use an investment manager.”
Above all, he says, it is important for investors to stay informed. “We cannot escape Trump, China and Brexit. It is always helpful to know what is happening in the global economy and the impact of this on your investments, whatever the size of your investment pot.”
Finances in a relationship breakdown
Liz Alley, Divisional Director, Financial Planning, Brewin Dolphin, says that many women who come to Brewin Dolphin do so when their relationships have broken down and many are not aware of the steps they need to take to ensure they have plans in place to meet their future income needs.
“Many women are simply not aware of their financial circumstances or of the options available to them. In fact, many seem to have a cautious approach to dealing with their own finances,” she says.
However, she adds that as a pension is increasingly one of the largest financial assets from a marriage, people should be aware of their pension arrangements as early as possible. “Clearly in the unfortunate event of a relationship breakdown, it is important for everyone to overcome any reluctance about dealing with finances and take advice as early as they can to ensure a fair split of assets for the future,” she says.
Brewin Dolphin is also a founding member of the WealthiHer network – established to champion the diversity of women’s wealth.
Carla Morris, Wealth Adviser at Brewin Dolphin said, “The main reason we wanted to be a founding member of WealthiHer is to help all women take responsibility for their own finances and have access to good planning and investment advice. This is not just about numbers. It’s about women’s priorities and goals and helping them overcome the challenges on their way to meeting those”.
1 30 April 2019 https://www.gov.uk/government/statistics/individual-savings-account-statistics
2 https://www.brewin.co.uk/individuals/our-services/online-investments/
-ENDS-
Disclaimers:
- The value of investments can fall and you may get back less than you invested
- The opinions expressed in this document are not necessarily the views held throughout Brewin Dolphin Ltd.
- Past performance is not a guide to future performance
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- This information is for illustrative purposes only and is not intended as investment advice.
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- Please note that this document was prepared as a general guide only and does not constitute tax or legal advice. While we believe it to be correct at the time of writing, Brewin Dolphin is not a tax adviser and tax law is subject to frequent change. Tax treatment depends on your individual circumstances; therefore you should not rely on this information without seeking professional advice from a qualified tax adviser. Brewin Dolphin is authorised and regulated by the FCA.
PRESS INFORMATION
For further information, please contact:
Richard Janes richard.janes@brewin.co.uk / Tel. +44 (0) 20 3201 3343
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Camarco: brewin@camarco.co.uk / Tel: +44 (0)20 3757 4980