You may be aware of the research that has recently been undertaken by Legal & General* that highlights women have significantly smaller retirement savings pots than men. This is down to several factors that range from having children, through to moving to part time work to help care for a friend or family member. These smaller savings pots are influencing the choices women are making at retirement.

We think it’s important that women have the tools and resources to help them manage the different events that may happen in life and consider at each stage how they can continue to maximise their retirement savings so that they have more options when they do retire.

We know that our emotional, physical and financial wellbeing can be challenged when faced with ‘first time situations’ and here we’ll uncover some of the steps to help set firm foundations for resilience as well as a handy lifeline guide to refer to in times of crisis.

Your handy financial essential checklist when your world around you starts to change…

1. Becoming a parent
   • Becoming a parent is an exciting, sometimes daunting time. As well as getting ready for looking after a baby, there are costs that come with it too. The MoneyHelper website has lots of support for you to consider during this time.
   • As your salary will likely reduce while you are on maternity leave, it’s important to check with your employer what options you have in terms of the contributions you pay into your pot over this period. This is often one of the reasons women end up with smaller retirement savings pots. Could you continue to pay in? Could your partner help with payments over this period?
   • Paying National Insurance contributions helps you build up a State Pension.  Whether you continue paying National Insurance contributions while you’re on maternity leave will depend on your personal circumstances and it’s worth checking this out – you can find out more at MoneyHelper
2. Planning to work part time
   • Many women decide to work part time at different stages of their life, for many different reasons. While you will be earning less money as a result, it’s important to review your outgoings – are you paying for anything you won’t necessarily need now you’ll be at home more?
   • Your retirement contributions are also linked to your earnings so the amount going into your retirement savings account will reduce. If you work any overtime, could you top up what you pay in? 
3. Divorce

   The average age for divorce for UK women is 43.9 years old. When assets are divided upon a divorce settlement every situation is different and depends on the parties’ circumstances and their needs. If divorce is something affecting you then the following pointers are worth considering:

   • Pension sharing is one of the options available on divorce or the dissolution of a civil partnership. It provides a clean break between parties as the pension assets are split immediately. This means that each party can decide what to do with their share independently. Find out more at MoneyHelper
   • You may have been relying on your and your partner’s incomes to manage your bills and now you’re wondering which subscriptions and utilities you can cancel to reduce your outgoings. If you are thinking about stopping your contributions, into your retirement savings pot remember – the money you are saving into it will help you later in life. You should continue to pay in as much as you can – don’t forget your employer will pay into your retirement savings too – and the government will also pay money in. Here’s some information that may help when considering how divorce can impact your assets: www.gov.uk/money-property-when-relationship-ends
   • Review your nomination of beneficiary form. If you are going through a divorce, consider whether you need to nominate a new beneficiary. Who would you like your retirement savings to be paid to if you were to pass away?
   • You may also find this video helpful: Pensions on Divorce: what should you do? - YouTube
4. Becoming a carer
   • Many people have to stop working to look after a loved one. It can be quite a change to your lifestyle which will take time to get used to. Age UK and Carers UK have lots of information to help with this transition.
   • If this takes you out of the workplace, the good news is there is financial assistance available to help. And you may be able to continue to paying National Insurance and build up a State Pension. If you care for someone for at least 20 hours per week, you could get Carer's Credit, which helps to maintain your National Insurance record. You can find out more about this at Age UK
5. Losing a partner:
   • If partner should die, as well as the emotional impact this has, there’s a lot of administrative things to consider – for example, the bills and subscriptions your partner had that are no longer required, any outstanding bills they had, managing bills you both paid together – you may now be entitled to discounts for some of these – for example council tax. MoneyHelper has lots of information to support you.
   • If you have been nominated as your partners' beneficiary, you will be entitled to some of their retirement savings. The pension scheme administrators will contact you about this.
   • Continuewith your own contributions into your pot – any benefits you get from your partner’s retirement savings will likely support you with your current expenses, but you’ll still need an income when you retire.
   • Review your nomination of beneficiary form. If you had previously nominated your partner, you’ll need to change this. Who would you like your retirement savings to be paid to if you were to pass away?
6. Debt management
   • As a general rule, it’s recommended that you pay off anything you owe before you start saving. If you are in debt, you should work to pay this off – Money Helper has lots of support around debt: Dealing with debt | Help and support with debt | MoneyHelper
   • If you find you do need to take a break from contributions into your retirement savings pot, first check whether you can reduce your payments rather than stopping completely. Any contributions you make to your retirement savings will be beneficial – don’t forget the money you pay in is invested to hopefully help it grow over time. 
   • Whether you reduce your payments or stop them, make sure you set a reminder to return to your normal contribution amounts once your debts have been settled.
7. Perimenopause and The Menopause

   For some women the impacts of perimenopause (which typically starts aged 40-44) and then the menopause (any time from aged 45-55) can have a profound impact on their lives. The physical and emotional effects are varied with some women being impacted more than others and this can go onto to disrupt physical, emotional and financial wellbeing with some women feeling that they have to leave the workplace. Its worth thinking about the following in case you or someone you know is affected:

   1. Seek help from your GP if you’re just not feeling your usual self, there is support in the form of HRT which for many can significantly reduce symptoms and ensure you can continue to live your life normally without the need to leave your job.
   2. Talk to your employer – many companies have menopause policies to support women going through this time time. 
   3. If you feel able to - talk about what you’re going through.  Sharing what you’re going through is one of the first steps in moving forward.
   4. Review your short-term savings so you have a cushion in case of any unexpected financial strain like a medical bill for specialist medical help.
   5. The menopause can often coincide with additional caring responsibilities so ensure you’re receiving all of the allowances you’re entitled to.

For additional support visit https://henpicked.net/ 

Summary

So it’s worth taking the time to find out what support is available to you at each life stage – we’ve included this checklist and links to resources to get you started. Whilst saving for retirement may not always be at the top of your priorities all of the time, checking in regularly and maintaining your contributions wherever you can will give you the best chance of achieving the lifestyle you want in later years. Your future self will thank you!

And don’t forget – it’s so important to talk to someone if you’re feeling overwhelmed or just need a chat. Your employer may offer an employee assistance programme.

You can also speak to someone at the Samaritans

Telephone: 116 123

Email: jo@samaritans.org

*The analysis is based on LGIM’s proprietary data on c4 million defined contribution members as at 6 April 2021, but does not take into account any other pension provision the customers may have elsewhere.