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Retirement planning for women: study reveals financial concerns

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The events of the last year have been extreme on many levels. Personal finance is one area that has been impacted by the coronavirus pandemic, with retirement planning being one of the main subjects of concern, particularly for women.

A study carried out last summer revealed that Covid-19 could potentially create a generation of people entering retirement without enough money to support themselves.

These predictions are troubling, however a significant number of soon-to-be retirees are already worried about running out of money in later life. A recent report by the Equity Release Council and equity specialists Key revealed that almost half (48%) of women approaching retirement are anxious about retirement planning allowing them to being able to afford to live comfortably when the finish their working life.

Additionally, under half (41%) of women who are still working feel confident that they will be able to afford to choose when they can leave their job. This is in stark contrast with 56% of men who are still working.

Retirement planning for women

The general trend of retirement planning

The uncertainty around retirement planning for life after work fits the overall trend, however. The proportion of homeowners, both male and female, aged 55 and over who are worried about running out of money in retirement has jumped to over a third (34%). This figure is significantly higher than the 27% a year earlier.

So, what has led to these concerns? One of the main reasons for women feeling more anxious about retirement planning than men about how they’ll fund their retirement could be down to the gender pension savings gap. The report explains that Office for National Statistics (ONS) data shows the value of women’s pension savings can be up to 40% less than men.

Another possible reason put forward in the retirement planning report includes the fallout of the pandemic. This has led almost a third (29%) of working women aged 55+ expecting to have a less comfortable retirement than their parents.

Health is, understandably, another key factor for retirement planning in the current climate. Nearly half (48%) of older homeowners are worried about finding the funds for care should they fall ill and 24% are worried about having to sell their home. More women than men are anxious about this possibility, with over a quarter (26%) thinking about this compared with 21% of men.

A glimmer of hope

Interestingly, women who are already retired aren’t as concerned about running out of money. Compared with the 48% of unretired women who are troubled about retirement planning and what comes after they finish work, 23% of retired women feel the same way. This hints at finances being manageable and offers some retirement planning hope for the future.

“While retirement is generally viewed as something to look forward to – an opportunity to take a well-deserved break after a busy working life – this report suggests that for many people stopping work is a scary prospect fraught with financial concerns,” said Will Hale, CEO at Key.

“Women who are disproportionately represented in hard-hit industries like hospitality and retail are already finding that their lower average salaries mean they are more financially vulnerable in retirement but both genders have been hit and are concerned about the future.”

For those who are approaching retirement age, there is still time to undertake retirement planning for their finances for the future. Now is the time to look at existing assets and see where there might be opportunities to create a comfortable setup in retirement.

For instance, could it be time to downsize to a smaller property and put current properties on the market? Or are there opportunities to take some tax-free cash out? Equity release can free up money if the property is worth over £70,000, so over-55s could tap into extra funds and create some added security later on.

If you’re feeling concerned about retirement planning and what comes after retirement, it’s worth taking the time to see where you might be able to build savings. This can help create a more comfortable future for you.

About Megan Totka

Megan Totka is the Chief Editor for ChamberofCommerce.com. ChamberofCommerce.com helps small businesses grow their business on the web and facilitates connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide. She specializes on the topic of small business tips and resources and business news. Megan has several years of experience on the topics of small business marketing, copywriting, SEO, online conversions and social media. Megan spends much of her time establishing new relationships for ChamberofCommerce.com, publishing weekly newsletters educating small business on the importance of web presence, and contributing to a number of publications on the web.

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