Women who change their working patterns during their 50s due to the menopause risk ending up thousands of pounds worse off in retirement, according to new research.
Insurance and pension company, Royal London, looked into the unique retirement planning challenges women face and how these contribute to the gender pension gap.
It found that menopause-related symptoms mean women are much more likely than men to reduce their working hours or stop working altogether in their 50s, a decision that delivers two financial blows. While changing your working pattern or stopping work will have an immediate financial impact of lost or reduced income, it also stops or reduces pension contributions at a time when many people are upping their efforts as retirement draws closer.
Royal London says that a 50-year-old woman who earns £40,000 a year, and who has a pension pot of £100,000, into which she contributes 10% of her income each month, would have built up around £355,510 in retirement savings by the time she reaches State Pension age. These calculations assume 2.5% wage growth until retirement and investment growth of 5%, but don’t include charges.
However, if she or if she reduced her working hours as many women do, this figure would fall considerably to £292,356, a reduction of £63,154:
| Full time | Reduced working hours from age 50 | Difference |
| £355,510 | £292,356 | £63,154 |
If the same woman stopped work altogether at the age of 50, her retirement savings would take an even bigger hit, and her pension pot would only be worth £229,202, or £126,308 less than if she’d continued working until State Pension age.
| Full time | Stop working at age 50 | Difference |
| £355,510 | £229,202 | £126,308 |
Source: Royal London
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’re looking for somewhere to start, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
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These figures make grim reading but highlight the important point that more needs to be done to support women going through the menopause in the workplace, so no one feels that giving up work or reducing their hours is their only option. While strides have been taken in recent years to start talking about the real impact of the menopause, there’s still a long way to go.
Clare Moffat, pensions expert at Royal London, said: “While the introduction of automatic enrolment ten years ago helped more women than ever save into a pension, the UK still faces a yawning gender pension gap.
“Women in their 50s, for a variety of reasons, are much more susceptible to leaving the workforce than men. Separate studies show that caring responsibilities mean women are twice as likely to be forced to leave their job than men. However, a notable barrier to remaining in work, which is only just beginning to receive increased awareness, is the menopause.
“While symptoms vary between individuals, for many women the menopause can have a big impact on their everyday life, often resulting in them reducing the hours they work or stopping work altogether. It’s only further down the line that the resulting missed pension contributions become apparent, but by then it may be too late.
What can you do to boost your pension pot?
All of this can make for harrowing reading, particularly if you’ve stopped working already, but whatever your situation, there are things you might be able to do to boost your pension pot.
If you haven’t got any retirement savings, it’s never too late to start building a pension. Our article Saving into a pension for the first time provides some information on how to start a pension if you haven’t yet done so.
If you are in a relationship, whatever your pension situation, your partner may be able to contribute to your private pension pot. Our article, Can my husband or wife pay into my pension – or can I pay into theirs? explains how to do this.
If you’re not sure whether you have enough saved for your retirement or don’t know whether your pension is invested in funds that are suitable for you based on your attitude to risk and you’re financial objectives, you might want to speak to an independent financial advisor who can recommend the best course of action based on your individual circumstances.
You can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guides on How to find the right financial advisor for you or How to get advice on your pension.
Finally…
If you’re experiencing menopausal symptoms and are thinking about how to manage work going forward, have a look at our article 6 tips to help you take control of menopause symptoms at work for some helpful suggestions.
The gender pension gap can feel like a huge subject, but it’s really important to understand what it might mean for your retirement plans. For more information on the gender pension gap and ways you can mitigate the impact of it, read our article Women and the gender pension gap. If you’re not sure whether you’re saving enough for retirement, our guide How much should I save for retirement? may help.
If you’re thinking about getting professional financial advice, you can find a local financial adviser on VouchedFor or Unbiased.
Alternatively, if you’re looking for somewhere to start, we’ve partnered with independent advice firm Fidelius to offer Rest Less members a free initial consultation with a qualified financial advisor. There’s no obligation, however if the adviser feels you’d benefit from paid financial advice, they’ll talk you through how that works and the charges involved.
Fidelius are rated 4.7 out of 5 from over 1,000 reviews on VouchedFor, the review site for financial advisors.