Despite the fact women have a longer average life expectancy than men, they often have much smaller pensions to live off.
This may be because they’ve taken a career break to have children and stopped pension contributions during this time, or because they’ve earned less. According to new research by lifetime mortgage lender More2Life, on average, men aged 54-64 expect to receive a retirement income before tax which is £5,964 higher than their female partner when they stop working. Single men also expect higher retirement incomes with those over the age of 55, typically receiving around £3,750 more a year than single women of the same ageSeparate research by insurer Sun Life found that Men over 50 are more likely to save regularly than women and have almost £44,000 more saved than women of the same age. Over half of women over 50 (51%) don’t think they have enough cash for retirement compared to 40% of men.
Ways women can boost their retirement savings
If you’re worried you don’t have enough put away for the future, there are ways to give your retirement savings a boost.
1) Join your company pension scheme
Under the government’s auto-enrolment scheme, most employees are automatically signed up to their company’s pension scheme, unless their income is less than £10,000. However, if your earnings are below this threshold, perhaps because you’re working part-time, you can still join your company scheme and benefit from employer contributions and tax relief on money both you and they have paid in. Your employer must pay into your pension if you earn between £6,240 and £10,000. If you earn less than £6,240 they aren’t required to contribute.
- You could transfer your old pension into a new arrangement that would then give you these new freedoms, the question is, should you? Find out more
If you don’t have access to an employer’s pension scheme, maybe because you work for yourself, you can still pay into to a personal pension and benefit from tax relief on your contributions.
2) Review existing pensions
Check your existing pension savings to make sure your money is working as hard as it possibly can for you, and that you’re not paying more than you need to in charges
Your contributions will often go into a one-size-fits-all ‘default fund’, but your pension provider might offer different funds which might suit you better.If you’re not sure where to invest your pension savings, seek professional financial advice.
3) Check you for any lost pensions
if you’ve had lots of different jobs over the years and signed up for a company pension each time, or you’ve moved home and perhaps didn’t let you pension provider know your new address.
If you think you could have any pensions you’ve forgotten about, the Government’s free Pension Tracing Service, may be able to help you find contact details for the providers they’re held with.
4) Claim your State Pension
You don’t get paid your State Pension automatically when you reach retirement – it’s up to you to claim it. The new State Pension is £164.35 a week, but to receive this maximum amount, you will need to have made 35 years’ worth of National Insurance Contributions.
If you’re missing some NI qualifying years, and if you can afford to, you can buy up to 10 extra years’ contributions at a cost of £795 for each full extra year. Buying one extra year will boost your State Pension by around £250 a year.
You might decide to delay receiving your State Pension so you can receive a higher pension later. For each year you defer, you’ll get an increase of around 5.8% in your State Pension.