Bridging the Retirement Gap: Women Over 55 Face Unique Challenges
New research conducted by behavioural finance experts at Oxford Risk reveals significant disparities between men and women over 55 regarding retirement income, savings, and financial planning. The findings highlight an urgent need for tailored financial advice to address these challenges.
Retirement Income Disparity
On average, men over 55 expect an annual pension income of £23,700, compared to £18,000 for women—a gap of £5,700. While women plan to spend £3,500 less than men, many still face a shortfall of £1,200 annually. In contrast, men anticipate a surplus of £1,000 per year. This discrepancy reflects broader financial inequalities and underlines the importance of strategic retirement planning.
Savings and Uncertainty
The study also found that 36% of women over 55 are unsure about their annual pension income, compared to just 20% of men. Women’s average savings, at £128,000, significantly lag behind men’s average of £209,000—a difference of £80,000. These disparities exacerbate financial insecurity for women entering retirement.
Funding Retirement: Different Strategies
Men and women also differ in their approaches to funding retirement. Women are more likely to rely on part-time work (41%) and property income (21%) compared to men (30% and 18%, respectively). Conversely, men are more likely to depend on self-invested personal pensions (25%) and investment portfolios (23%) than women (16% and 10%).
Over-Reliance on Cash
Nearly half of women (50%) and 53% of men rely on cash surpluses to support their retirement. While cash provides emotional comfort, it often underperforms compared to investment options. This reliance on cash undermines efforts by regulators, such as the FCA’s Consumer Investments Strategy, to encourage smarter investment practices.
Expert Insights
Dr Greg B Davies, Head of Behavioural Finance at Oxford Risk, commented:
“Our research highlights significant disparities in retirement readiness between men and women. Women face unique challenges, including lower savings and greater uncertainty about their financial future. Advisers play a critical role in bridging these gaps by offering personalised strategies that empower individuals to optimise their retirement plans.”
Solutions for a Secure Retirement
Financial advisers have an opportunity to close these gaps by leveraging behavioural finance tools to deliver tailored advice. Tools like Oxford Risk’s proprietary algorithms can align financial strategies with clients’ unique goals and preferences, helping them make informed decisions about retirement planning.
At Pension Pathfinder, we are committed to addressing these disparities by offering comprehensive financial guidance tailored to your needs. Our team can help you optimise your retirement income, explore alternative funding strategies, and make smarter investment choices.
Contact us today at admin@pensionpathfinder.co.uk to learn more about how we can support you in achieving financial security in retirement.
