Pension engagement – it’s a question of gender


MoneyPlus Features Team

26th May 2016 at 8:00am

How often do you review your investments? According to a new survey, gender may play a big part in answering this question.

The gender gap

Research from Fidelity International found that women lag behind men when it comes to reviewing their investment options and as result could be in for a shock when it comes to retirement.

Hardly the “weaker sex” in terms of employment and earnings: women are working more than ever, earning more than ever and, in some age groups, are outstripping their male counterparts in terms of overall pay. Yet, when it comes to reviewing their pension investments, they are less engaged than men.

Research shows…

That 25% of women surveyed don’t know the value of their pension pot or how much income they’re likely to receive in retirement, a figure almost double that of men. And those that do take an interest are likely to review their pension pot and its underlying investments fewer than once a year, which shows how little focus they have on the financial performance of their funds.

This is particularly concerning given that women are generally expected to live for longer than men, which means they’ll need more pension savings to accommodate the extra income requirements.

Trends are changing too, as we see an increasing number of women now single and/or divorced in later life and cannot, even if they chose to, rely on a partner for an income in retirement. In the UK it is expected that almost half (42%) of marriages will end in divorce with the average age at divorce being 45 for men and 42 for women. This suggests women should be even more focused on building their own, independent, pension savings.

So what could be fueling this apathy in the fairer sex?

Empirical evidence would show that women are just less likely than men to invest. And separate research from RateSetter puts this down to them being less willing to take on financial risk – indeed; the same research found that women are almost twice as likely as men to describe themselves as “strongly risk averse”.

Time appears to play a big part too. While equality in the workplace is to be applauded, it appears there is still a pressure on women to be embroiled in many of the age old domestic practices. Attitudes may have changed but some behaviours haven’t. The result being, women are increasingly time-poor.

Maike Currie of Fidelity International points out “The basis of good pension planning starts with knowing how much to expect in retirement and it is vitally important that women, whatever their age, engage with this, rather than burying their heads in the sand. Women building up a pot today should invest and have financial plans in their own right. If you are time-poor and finding it challenging to make time to plan for your retirement, it could be prudent to seek high quality expert help.”

While seeking expert help might seem prudent, surprisingly, this lack of female engagement doesn’t mean that women are more likely to seek professional advice – in fact, it’s the exact opposite. 25% of women said they found the financial planning process difficult (compared with 16% of men), which could explain why 21% prefer to seek advice from family and friends (vs. 13%) and why only 36% have sought independent advice, compared with almost half (46%) of men.

But even when women do seek advice the key driver was the desire to have everything in one place at 44%, while for men the majority, at 52%, said they were looking to enhance performance. Only 20% of women said this was their main driver.

Getting the right steer

There can be real value gained by taking time out of a busy lifestyle to get the right advice and review an investment strategy. The long-term gains may well outweigh the short-term cost and sacrifice.

The value that comes from financial advice may take numerous different forms, including:

  • Return on investment
    Getting back more money than you invested, including the cost of the advice.
  • Future security
    Ensuring you will have enough income in later life.
  • Peace of mind
    Knowing you have made the best practical choices and obtained the best deals the market has to offer you.
  • Achieving goals
    Overcoming challenges and reaching milestones.
  • Avoiding mistakes
    Reducing the risk of making financial decisions you regret.
  • Opportunities
    Discovering new and unexpected ways to make your money work harder for you.

A welcome time-out

So if you are finding yourself time-poor, making the effort to review your pension and seeking professional advice if required, could make all the difference to your eventual income and comfort in retirement. That time out could be time well spent.

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The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in May 2016.


Professional Adviser