Women can face many different financial pressures throughout their lives.
Laura Newman, head of client advice and investment services at NatWest Premier (natwest.com) reflects on some of the obstacles women face as they go through different life stages, and what can be done to mitigate them.
Newman says: “Women take off time to look after children, take career breaks, and they’re generally the main carer as well.”
If elderly parents become ill, it is often women who will take time out of the workplace to care for them, she adds.
As this may involve reducing working hours, it’s important to consider the long-term impact this could have on pension savings – as well as the short-term impact on wages.
Recent research from Phoenix Insights and the Institute for Employment Studies (IES) indicate that just one-third (34%) of women who have reduced their weekly working hours have considered the impact on their monthly workplace pension contributions, and 36% considered the impact of reducing their hours on their overall pension pot.
If a woman is in a workplace pension scheme and their employer contributes to it, the firm must continue doing so while the employee is receiving statutory maternity pay.
More information can be found on the Government-backed MoneyHelper website at moneyhelper.org.uk.
If an employee reduces their hours when they return to the workplace, this could mean less money going into their pension.
Newman suggests they may want to consider paying in additional pension contributions beforehand, if they are in a position to do so.
She adds: “If you decide not to return to work, don’t lose sight of that pension. On average people have had 11 roles throughout their lifetime, and there are so many people we’re finding today where they’ve forgotten about the small pension pots that have been built up in different areas from different companies they’ve worked for.”
The Pension Tracing Service can help track down lost pension pots.
It’s also important to check any entitlement to credits that could help towards your state pension.
Child Benefit can enable parents to get National Insurance credits, which could boost their state pension entitlement.
Grandparents and other family members caring for a child may also be able to get National Insurance credits.
More information on who could receive National Insurance credits can be found at gov.uk/national-insurance-credits.
Childcare costs can sometimes make it difficult to make the return to work.
Parents can check what help they could get with childcare at childcarechoices.gov.uk.
Depending on the job, it may also be possible to negotiate more flexibility around your hours or the ability to work from home with your employer, which could help ease some pressures around childcare costs.
It’s also important to check whether you might be entitled to any tax breaks.
For example, the Marriage Allowance can help couples pay less tax overall. It allows one person in a couple to transfer a portion of their tax-free Personal Allowance to their spouse or civil partner, in certain circumstances.
More than 2.1 million couples currently benefit from the Marriage Allowance, but HM Revenue and Customs (HMRC) estimates that thousands more are missing out, particularly if, for example, one partner has retired, has given up work to take on caring responsibilities, or is unable to work due to a long-term health condition.
A Marriage Allowance calculator is available on gov.uk to help couples check eligibility.
Some surveys suggest women in particular may face issues of confidence when it comes to finances.
NatWest’s internal staff research, carried out last year, found 55% of women said they invest compared with 80% of men.
However, nearly half (47%) of female non-investors in NatWest’s survey felt they could afford to invest, compared with around a third (34%) of men.
Newman says she is passionate about encouraging women to consider a career in financial planning.
“The more that we can increase the level of women financial planners, I think that will give women more confidence to actually sit down and take that advice,” she says.
She also says people should not be worried about asking questions about finances.
“I always say no question is a silly question. If you have that question, that’s because you need an answer to it,” she says.
Newman adds: “Sometimes it’s a situation like divorce, like death, unfortunately, that will force someone into actually trying to find out further information.”
It’s also important in the event of a divorce not to overlook pension pots when dividing assets.
Newman cautions: “Pension wealth is very unequally distributed among married men and women, so a divorce where pensions aren’t split can leave women significantly worse off.”
She also emphasises how financial advice can help, adding: “We seek help from experts in many areas of our lives, and this should extend to personal finance too.
“It’s important to speak to a specialist it comes to financial, tax and legal matters, which can often be complex. This means you can get support to make sound decisions and build a plan to match your future goals.”