Life expectancy is increasing, and more people are living to age 100. People typically spend 20 to 30 years in retirement, sometimes longer, and so retirement funds need to stretch further than ever before.With odds stacked against them, women are likely to be worse off in retirement than men. Women are far less likely to seek financial advice for several reasons including a lack of confidence, because they do not think they are wealthy enough, or because they find the idea of seeking advice a daunting and intimidating experience. The stark reality is that many women will unfortunately outlive their retirement savings.Why are women at a disadvantage in retirement?On average, a woman’s pension is just one fifth of the size of a man’s pension at the age of 651. What’s more, women typically live longer than men, and so they are left with a much smaller pension that needs to last longer.Women are further disadvantaged if they get divorced. While the divorce rate in the UK is decreasing overall, divorces among the over 60s are increasing. A divorce can have a negative impact on personal finances.Here are just some of the reasons why women typically retire with less money than men:
- Many women take time out of work to raise their family and so their income is reduced.
- After a career break, women are less likely to receive a pay rise.
- The gender pay gap persists and it is exacerbated when women approach retirement. More than 60% of women choose to work part-time between the ages of 52 and 69, compared with only 24% of men2.
- Women are less likely to have investment experience and, in many circumstances, household savings and investments are managed by men.
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