3 clever ways women can look forward to a secure financial future

Happy mature women on iPhoneYou may not have realised that 2023 marks the anniversary of several milestone events. This includes the 60th anniversary of JFK’s assassination and the first episode of Dr Who being aired, as well as 50 years since Concord crossed the Atlantic.

There is another significant anniversary this year, and one that’s particularly significant for women: it’s 50 years ago this year that women were admitted into the stock market. Despite this, and even with the significant strides that have been made in helping women become financially independent, there’s still a significant gender gap.

According to Aviva in January 2023, women aged 60-65 years old have pension pots that are on average just over half (57%) the size of men’s pots at the same age. Despite this, other research reveals that women may be better than men when it comes to investing, yet typically do not have the confidence to take the plunge and find out for themselves.

If you’re a woman and want to enjoy the peace of mind that comes with knowing that you’re financially secure, discover three actions you could take. Additionally, learn how a female financial planner could help.

1. Make the most of your pension

According to the abovementioned Aviva report, which was based on data from more than 5 million workplace pension schemes, the gap between women’s and men’s pension contributions for 35- to 39-year-olds is 21%.

This increases to 24% for 40-44 year-olds and 27% for 45-49 year-olds, and rises to 32% for 50-54-year-olds.

One reason for this could be that many women take career breaks to bring up children, or take part-time roles that reduce their salary and pension contributions. Taking steps to boost your pension contributions if it’s possible could be something you need to consider, as it could ensure your retirement fund can support the lifestyle you want when you finish work.

Working with a financial planner can help you understand your options, which might include boosting your contributions to your workplace scheme or paying into a private pension scheme. Remember that the tax relief that’s provided on pension contributions means you’ll typically pay £80 for every £100 you contribute as a 20% basic-rate taxpayer.

If you’re a higher-rate taxpayer, you could pay just £60. As you can see, this means you could help give your pension pot a significant boost in a relatively short period of time.

2. Consider investing your money

A study by the Royal Mint reveals that 41% of women tend not to invest, compared with just 14% of men. One reason for this, the research revealed, is that women believe they have insufficient knowledge around investing, with only 37% saying that they understood the basics of investing.

This compares to more than half (56%) of men. Small surprise then that This is Money reveals that nearly a third of men in the UK have a Stocks and Shares ISA, compared to 16% of women. Interestingly though, the article also suggests that women may be better investors than their male counterparts.

One reason for this is that they tend to hold their nerve when the stock market becomes volatile, meaning they’re less likely to sell their investments in a bid to limit losses during a downturn. This means women’s investments have the potential to recover and grow in value when the stock market bounces back.

Please remember, though, that past performance of the stock market is no guarantee of future performance.

Working with a female financial planner could help you get a better understanding of investing, the risks involved and the options available to you. This could help you expose your money to greater growth potential, which could provide financial security down the line, and peace of mind.

3. Create an adequate emergency fund

Ensuring you have a robust “rainy day” fund is central to good financial practice. Recent years with the Covid pandemic have demonstrated that life doesn’t always go to plan, which is why it’s essential to have enough money to stay financially afloat when life throws you a curve ball.

Typically, you should have between 3 to 6 months’ worth of expenditure in an easily accessible account, although this always depends on your circumstances. This money can then be used to deal with unexpected events, such as the boiler blowing up, without relying on expensive credit cards or loans.

Furthermore, it might help you maintain your standard of living if you’re unable to work due to illness or an accident. This could ensure that you live comfortably while continuing to pay your pension contributions, which will protect your long-term financial security.

Get in touch

A report by Royal London suggests that 73% of men would discuss their money with a financial institution, while 66% of women would do the same. This means that some women are missing out on advice that could improve their financial wellbeing, and if you’re one of them, we would be very happy to help.

As a financial practice we understand the financial effects of life events on women’s lives, such as having children, divorce or dealing with the gender pension gap. As such, we are experienced in providing empathetic advice and effective solutions that could help provide you with the financial security you seek.

If you would like to discuss this further, please contact us on info@janesmithfinancial.com or call 01234 713131.

Please note

This blog is for general information only and does not constitute advice. It should not be seen as a substitute for financial advice as everyone’s situation is different.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Your pension income could also be affected by the interest rates at the time you take your benefits.

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