Experts Say Ending ‘Financial Planning Gender Gap’ For Retirement Needs Urgent Attention
Men over 40 are more likely to plan for retirement and know how much income they need for later life than women of the same age, a new study has shown.
A survey from leading national law firm Irwin Mitchell and YouGov looking at attitudes of men and women towards later life care shows the traditional gender divide for financial planning is still prominent– with men aged 40+ more prepared than women aged 40+, and also more likely to understand their financial options.
Financial planning gender gap emerges in findings
While nearly a quarter (23 per cent) of men over 40 said they didn’t have any plans for retirement yet, this figure rose to a third (32 per cent) in women. When asked about the income they would need for retirement, a third (32 per cent) of men said they knew what funds were needed and how they would achieve it – in comparison to just over a fifth (22 per cent) of women.
The results followed a similar pattern when respondents were asked about policies that could be introduced for later life care that would benefit them personally. While men were more likely to favour higher taxes – 29 per cent compared to 19 per cent of women – women were more likely not to know what would benefit them at all, with a third (32 per cent) choosing this answer compared to less than a quarter (23 per cent) of men.
The findings reflect how when it comes to later life and financial literacy, traditional gender divides still remain – with many women projected to fall behind in later life.
Expert Opinion“Later life planning isn’t something that comes to the forefront of the mind, especially when there are so many other exciting life milestones to plan ahead for – yet what these figures are showing is that women are less likely to be prepared for later life.
“The fact that women over 40 are less likely to know what income they need to retire on, are more likely not to know or understand about later life care and the costs and also more likely not to have any plans for retirement only suggests women will suffer more in later life if the Government does not do something to address this area.
“Traditionally men are considered more financially savvy than women – even though women often control the household’s budget – which is reflected in the findings. However, this cultural divide as well as the stigma around talking about money isn’t helping this problem.
“We’ve been campaigning for years about how social care reform needs to be prioritised in the Government’s agenda. Seeing now how some men, but even more women, don’t know what the best option would be for their personal circumstances suggests a serious number of people are going to fall short financially when it comes to later life.” Emma McCann - Partner
Men investing, women supporting loved ones with coronavirus savings
There were also differences in responses between men and women over 40 when asked about their saving habits during the pandemic.
When asked what they were doing with any extra savings arising from the coronavirus pandemic, men were more likely to invest the money – 22 per cent instead of 12 per cent of women – and also slightly more likely to contribute to their pensions, sitting at 10 per cent compared to 6 per cent of women.
Women were also slightly more likely to say that if they hadn’t saved it was because they needed to support loved ones financially, with a fifth (21 per cent) of women choosing this as opposed to 16 per cent of men.
Expert Opinion“The survey showed a definite divide between older men and women on attitudes towards saving – some of which can be harmful as they approach retirement age.
“There has always been a secretive culture around investing that many think means it’s inaccessible to them – once you pair this with the societal and cultural divide between men and women when it comes to finances; women unfortunately lag behind, usually due to lack of confidence or understanding.
“Investing is easier than ever to get started in these days thanks to the wealth of websites and apps that can help manage your portfolio. Some universal advice for both men and woman is that it’s always beneficial to speak to a financial adviser as well if you don’t know where to start.
“It’s also concerning to see so few women choosing to put more funds into their pensions, which will directly benefit their later life planning and essentially automate it for them. The pensions gender gap is well-known at this point, so it’s clear there’s more work to be done in educating on the benefits of opening up a personal pension or contributing to your existing work one.
“Pension planning for women is especially important as they tend to live longer than men, so it’s well worth speaking to an advisor to see if your pension is looking up to scratch for later life.” Jason Mountford - Financial Planner