Lack of confidence means women over 50 are not making the most of their financial future
A new study released today has revealed the growing tendency of older people, and in particular women, to frown at the thought of entrusting their money to financial organisations.
The study, by Saga Investment Services reveals that the problem rests with the notion amongst the over 50s that financial companies deliberately complicate issues, with a quarter confessing to being intimidated by financial organisations. All of this is means that they are not making the most of their nest eggs for the future.
Women were found to be generally more risk averse, with over half (52 per cent) saying they are not willing to take any risk with their money at all in comparison to only 36 per cent of men who feel the same. For the 14% of women now widowed or divorced this could be attributed to the fact that their partner made all the financial calls.
Life changes such as becoming widowed or divorced forces many women to have to think about finances for the first time, one in seven women who had been widowed or divorced said that their spouse used to make the financial decisions. Tackling finances for the first time is worrying or intimidating for many people, Over a quarter (27%) of all those who have been widowed or divorced, overall agreed that they were worried about making the decisions for the first time – but the number of women who felt this way (30%) was significantly higher than men (19%).
Whilst women are very comfortable on the whole dealing with everyday banking and budgeting, they are far less confident than men when it comes to making decisions about their pension or about making investments. This is particularly true of people in their 50s; three quarters of men in this age group said they were happy making investment decisions, but under two thirds of women felt the same. One in eight women said they are not confident about making decisions about their pensions
The study of over 10,000 over 50s, reveals the overarching apprehensiveness amongst over 50s to talk about money and what to do with it, particularly when left large sums of money through inheritance from parents or partners.
And this reluctance to talk leaves nearly half of women (47%) more likely to decide what to do unilaterally, not consulting with financial advisers, family or friends, compared to 33% of men. While at first blush, this might seem like a sign of confidence, the survey suggests that it is because women might be more intimidated than men to engage or talk about finances with anyone - neither professionals nor friends and family.
Nearly a quarter of Brits in their 50s also confess to being intimidated by financial organisations, with nearly 28 per cent believing that these companies deliberately make things more complicated for their age group and one in ten women feel that financial services companies are set up more to help men than women. It is no surprise then that a majority of over 50s have savings in the form of the property that they live in (87%), cash (44%) or pensions (82%), rather than other investments.
Sally Merritt, product manager, Saga Invest Services commented: “With rising inflation rates slowly eating away their nest eggs, the over 50s still holding cash are losing money in real terms on their savings. That people are put off dealing with financial services companies as they find them intimidating shows that companies need to work harder to engage with people in a language they understand, and earn people’s trust through building meaningful long-term relationships with them, in order to help them make the most of their retirement savings.”