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[Meet life goals] The importance of retirement planning for women

24 Mar 2023

Among the retired women involved in a survey carried out by YouGov for HSBC1, over 90% said they need up to £30,000 (around USD38,500) a year to fund their lifestyle. However, for many women, this amount is difficult to obtain. Another 29% stated that they don’t have enough money to make ends meet. A further 10% said their retirement savings aren’t enough to cover household bills, while 30% of respondents can’t afford to run a car.

Retirement planning is critical for women worldwide

Although these numbers may vary from country to country, it does serve as a wake-up call to all women regardless of where you live. Globally, the gender pay gap is improving, but women generally earn less than men throughout their careers, which limits the amount they can save for retirement. For example, women are more likely to take career breaks or reduce their working hours to look after children or elderly parents, thereby affecting their pension contributions and retirement income.

As women live longer, they need retirement income for longer

Life expectancy has also increased, with women generally living some four to eight years longer than men, due partially to more male smoking and drinking alcohol, physical stress with simultaneous aversions to medical treatment and health precautions, as well as genetic reasons2. Therefore, any retirement income may need to stretch further over a longer period of time for women. This fact shouldn’t be under-estimated. The earlier you start saving for your retirement, the more likely you are to:

  • be financially independent
  • have sufficient funds available to support the lifestyle you want
  • be able to cover an unexpected expense after you stop working

5 ways to boost your retirement savings

Taking action feels good. Here are some positive changes you can make today for a more comfortable retirement.

1. Maximise your pension contributions

If you can, now is the time to add as much as possible to your workplace pension or your retirement savings and make the most of tax relief from the government. Some employers offer to match your contributions up to a certain limit – if yours does, try to make the most of it. 

If you’ve taken a career break, you may have gaps in your retirement savings. It may be possible to make voluntary contributions to make up for these.

2. Save more by making small changes

Take a look at your budget to see where you could potentially free up money. The more you save now, the more you’ll have to retire with.

3. Consider investing

Investing is an alternative way to save for your future, and could potentially provide higher long-term growth than leaving your money in a savings account, and help you combat inflation. The key difference is there are no guarantees as the value of investments can go down, as well as up, and you may not get back what you invest. 

4. Make the most of joint allowances

If you’re married, in a civil partnership or in a stable relationship with shared assets, you may want to look at both your pensions and savings together. Try to work out the cost of living together when you’re no longer working.

5. Adjust your retirement plans

If you’re near retirement age and are concerned you won’t have enough money, think about whether you can delay when you finish work. If that’s an option, let your pension provider know as it may make sense to change the ways in which your pension is invested. 

Switching to reduced working hours or ‘semi-retirement’ can also give you more financial security, as well as a better work-life balance.

Notes: 1/All figures, unless otherwise stated, are from YouGov Plc for HSBC. Total sample size was 1,048 retirees and 2,695 non-retirees, ranging from ages 18 to 55+. Fieldwork was undertaken between 5th and 6th January 2022. The survey was carried out online. The figures have been weighted and are representative of all Great British adults (aged 18+). 2/ -

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