Women worry more than men about retirement

Men and women are said to be poles apart in so many ways, but recent research from The Hartford, conducted in conjunction with YouGov, shows that differences are particularly stark when it comes to attitudes towards retirement. The survey shows that 54% of women aged 45 to 54 are ‘somewhat' or ‘very' concerned that they will outlive their money in retirement, versus just 45% of men in the same age group.

In an era when increasing numbers of women juggle work and home life, and are more involved in the financial decision making for the family, it is no surprise that women are more concerned about whether they will have sufficient funds for their retirement. This growing anxiety is borne out of the fact that women are more financially aware, which is a call to action for Independent Financial Advisers to help more women plan for their future and allay their fears about retirement.

The credit crunch is also creating a new hurdle for those who may have been hoping to top up their pension pots. 61% of non-retired women surveyed aged 45 to 54 are thinking more about their day-to-day finances in the current tough market conditions rather than thinking about their retirement plans compared to just 50% of men.

Michael Rudge, Managing Director, UK, Hartford Life Limited, said: "It is entirely understandable that women are now worrying more about retirement than men. In addition to living longer than men, women often appreciate the cost of living more. Independent Financial Advisers, therefore, have a significant role to play in advising women who often feel more afraid about moving from work to retirement than men. Having a pension product that guarantees the level of income received throughout retirement, as well as locking in gains when the markets rise, can be immensely reassuring for those who are worried about running out of money in retirement."

In addition to fears that the money could run out part way through retirement, almost two thirds of women (63%) in the 45 to 54 age group are ‘very concerned' or ‘somewhat concerned' that they will have difficulty managing their money in retirement, versus just under half (49%) of men. The findings also showed that 26% of women aged 45 to 54 said they were ‘afraid' of moving from work to living off a pension, almost double the number of men (15%).

Furthermore, with price rises regularly grabbing the headlines, 49% of women aged 45 to 54 are ‘very concerned' that the cost of living will grow faster than their income in retirement. In fact, most people are already making adjustments to the way they spend due to the credit crunch, 72% of women aged 45 to 54 saying they had cut back on ‘non-essential' spending such as holidays and treats (the highest level by far across all age categories and both sexes) against just 60% of men.

Michael Rudge added: "While the research shows that women are more worried than men about some aspects of retirement, their worries are not unfounded. Women are paying more attention now than ever before on how to save but, especially in the 45 to 54 age bracket, often have so many pressures on both their time and money that they can find it difficult to plan for retirement. It is never too late to start planning, and an Independent Financial Adviser can really help give tailored, practical advice on how best to provide for their individual retirement needs."

Finding the solutions

While the survey findings show that many women are justifiably concerned about how they will cope in retirement, The Hartford has outlined a number of ways which could help women prepare better:

Consider retirement products that offer guarantees: As women are living longer there is more risk that inflation and cash flow needs will eat away the retirement nest egg. One option is to consider guaranteed retirement income sources such as guaranteed drawdown to help protect the value of savings up to and through retirement. Hartford Platinum comes with a unique optional guarantee called the Hartford Guaranteed Retirement Income Plan. It offers the potential to lock in investment growth up to a maximum of 10% each year. This means the Guaranteed Retirement Income Plan adds a layer of protection and guarantees that your retirement income won't disappear if the markets go down.

Plan early:

Worry can lead to fear, which can lead us to invest much too conservatively, particularly during periods where markets are volatile. As retirement is likely to last longer than for previous generations, women need to start investing early in a wide variety of retirement savings vehicles and a wide variety of asset classes, both individually and through their employer.

Get involved:

Women are more likely to become carer to other family members or even friends. However, it is just as important that they take care of their own financial and physical health. Even though they are juggling many priorities, women should stay involved in the financial planning process, either solely or with their spouse. It is also important to keep abreast of the changes taking place in the retirement market in order to make the best decisions, so Independent Financial Advisers can prove invaluable in this process.

Additional findings from the survey:

Generally men think more about planning for retirement, and the credit crunch has caused some women to worry much more about money now and even less about how they will fund their retirement. The survey revealed 61% of non-retired women aged 45 to 54 to be thinking more about their current situation given the current tough market conditions/credit crunch and less or not at all about planning for retirement, versus 50% of men who said the same thing.

Londoners are the slowest at cutting back on spending on ‘non-essential' items such as holidays, treats etc because of the credit crunch, with just 50% making downward adjustments, versus 64% of Scots, 63% in the North of England, 62% in the South of England outside of London, and 56% in the Midlands and Wales.

29% of non-retired respondents across the age categories said they were focusing more on their current financial situation and not at all about planning for retirement due to the current credit crunch and tough market conditions.

Only 17% of women aged 45 - 54 said that they were ‘satisfied' with their efforts to save for retirement, versus 31% of men. Only 2% of men and women in that age category were ‘proud', and 22% of women and 29% of men were ‘disappointed', and 29% of women and 20% of men were ‘depressed' about it.

36% of women aged 45 - 54 are ‘very concerned' that their physical health will decline in retirement, versus 23% of men.