Women less prepared for retirement than men

Financial wellbeing index 

The survey of more than 5,000 people was conducted by the merchant bank Close Brothers, with the findings published in their Financial Wellbeing Index. The study shows the financial gap between men and women doesn’t stop at salaries: 

• Half of the men questioned (53%) were confident in choosing the right financial product to achieve their long-term goals, while only a third (35%) of women shared their confidence 
• Nearly half of the women questioned (48%) felt unprepared for retirement, while only a quarter of men (25%) felt the same
• The average amount in a woman’s workplace pension scheme was less than half that of male works – £53,000 for women compared to £120,000 for men 
• Nearly twice as many women (16%) worried about meeting their day-to-day living costs, compared with only 7% of men. 

Retirement concerns

The survey also suggests that people do not feel confident about their later life finances: 

• A third of people questioned (36%) felt unprepared for retirement 
• A third of respondents (31%) said that funding their retirement was their top money worry 
• More than half (57%) thought they won’t be able to retire when they want to
• A quarter of employees (24%) expect to have to work in retirement 
• A quarter of employees with a pension never review it (24%)

The role of equity release schemes in retirement finances 

With widespread uncertainty among those questioned about how they are going to finance their retirement, it is perhaps not surprising that one in five (21%) said they were planning on downsizing their home or releasing equity from it to have the necessary retirement income. This reinforces trends seen in the sector, with equity release lending breaking new records in the final three months of 2018¹, according to the Equity Release Council.

‘With more of us living for longer, we know that funding our retirement is a growing challenge for more and more people – and this survey by Close Brothers reaffirms this,’ commented Jan Johnson, director of 55+ Equity Release. ​‘Fortunately for home owners, the growing number of equity release products means they have more and more choice about releasing equity from their homes so they can realise their retirement dreams, whether that is simply having peace of mind that they can pay their bills or planning the holiday of a lifetime.’ 

However, the gender gap in retirement finances comes as no surprise to Jan. ​‘Many of our clients are single women; although some want to help children onto the property ladder or to carry out home renovations, others need a cushion to ease everyday financial pressures. The latest figures from the Equity Release Council confirm this, with more than double the number of single plans being taken out by women than men in the last six months of 2018²,’ she said. ​‘Fortunately, our expert over 55 equity release advisers are experienced at guiding people from all walks of life through the equity release maze to help them make an informed, unpressured decision, including those who have little previous experience of managing their finances.’ 

With more and more people concerned about how they will fund their retirement, our equity release experts are always happy to provide a no-obligation initial consultation to explore whether an equity release scheme could be an appropriate solution.

*Sources

1. Equity Release Council, UK Equity Release Market Report, Q4 2018
2. Equity Release Council, Spring 2019 Market Report