We need to tackle a big problem area for women and our finances - our retirement savings.

As women, we tend to live longer, which is good news, but sadly we also still tend to earn less than our male counterparts and so unfortunately typically save less. Combined, these two things mean it is all too easy for us to come-a-cropper decades down the line when we find our financial wealth failing and the terrifying realisation that it’s far too late to do anything about it.

Do you know how much to save for retirement?

At Fidelity we carried out a survey and found that we women know what we should be doing when it comes to our future finances, we just don’t necessarily give them the care and attention they need, in order for us to make sure we are financially secure in retirement.

Take the question, “how long do you expect to need money to live off in retirement?” On average the response was “just over 20 years”. For a woman retiring at the state pension age of 65, this would give a pension that lasts until the age of 86 or thereabouts, which is perfectly in line with the average woman’s life expectancy of 82.9 years. 

However, when it came to these same women being asked whether they think they will have enough to last them these 20-odd years, over a quarter admitted they didn’t think they would. And these were women ranging in age from 35 to 64 years old.

Worryingly, 25% of the women we spoke to have never really calculated how much they will probably need in retirement. And 21% of women said they have not considered life expectancy as a factor when thinking about how much they need in retirement either. Yet these are two essentials to consider when it comes to retirement planning. Just as worrying though is the fact that some 27% said they haven’t got a clue about how much they contribute to their pension out of their salary and 20% admit they never check their pension.

Mind the pension gap

The fact is that as women we face a substantial gender pension gap. And it is only by planning and saving early that we can set enough aside to retire comfortably.

Admittedly, when you are young, sorting out your finances for the long-term can fall far down the list of priorities. However, it’s vital that young people, especially young women start thinking about their longer-term financial health as early as possible. 

Whether you are saving for retirement or other financial goals, investing your money early, even if it’s just a small amount, will give you the best chance of having a substantial pot of money when you need it.

For young women, who may in the future take career breaks or work part-time as they raise a family and therefore miss out on vital pension contributions, this is even more important. Putting your hard-earned money to work and keeping it working hard is essential for your retirement success. 

Next steps

Not sure where to start when it comes to your long-term savings? Take a look at our Retirement Savings Guidelines, to see how much you should be saving now to live the retirement you want.

Important information

The value of investments and the income from them, can go down as well as up, so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Withdrawals from a pension product will not be possible until you reach age 55. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.