The Office for National Statistics’ most recent reports show that men can expect to live a healthy life until the age of 62.9 years, whist the expectation for women is 63.7 years. The gap between the two has been closing since 2011. However, the statistics show that women can expect a period of 19.8 years during which they are likely to need care, compared to 16.5 years for men.
These statistics serve to remind us that, on average, women will pay out more funding for care than men. And it’s not just the age difference; women’s pension savings tend to be lower than those of men.
How the Pension Gap Affects Women
Research carried out by Prospect finds that in 2019-20 the pension gap for women was 37.9%. This is more than double the pay gap which was running at 15.5% at the same time. This inequality between men and women has many contributing factors, including:
- Women take breaks from the workplace to have children
- Many women work in low pay jobs
- Fewer women than men (historically) are automatically enrolled into a pension scheme
Government Planning for Care
Successive governments, both left and right, have promised to address the problems of an ageing population, including the provision of social care. Most recently, the Conservative government proposed a new tax, the Health and Social Care Levy, to raise £5.4 billion. The money raised will provide £3.6 billion to fund reforms of how people pay for social care.
The new arrangements establish an £86,000 cap on the amount individuals will have to pay for care during their lives.
Women Planning for Care
Whilst the reform of social care is now underway, it’s likely to take a good many years to complete. For women approaching their retirement, we would recommend that they work proactively towards considering care funding as part of their retirement planning. It all starts with a conversation about what you want from your retirement, and how much you will need to fund it.
Harpur Wealth Management advisors start in the same way with every client. We ask you to tell us about your family, your work history, and your plans for the future. We’ll ask when you plan to retire, and what you would like to do with your free time once you have.
Once we have got to know a little about your life, your responsibilities, and your goals, we look at the income you are likely to need to fund your retirement, including care. We offset your current pension arrangements and any other sources of income you may have. Then we set to work on creating a plan for bridging any financial gap that has been exposed.
A Long-Term Professional Relationship
At Harpur Wealth Management we provide tailored advice and planning for each individual client. We are acutely aware that women will have different work histories to those of men and may have different familial responsibilities as they get older. We promise to listen carefully to the information you give us, and provide accurate advice tailored to your situation.
Are you new to wealth management? Book a free consultation with a Harpur Wealth management advisor today. Simply call us on 01234 924620 or contact us online.
Disclaimer
This article is for information only and must not be considered as financial advice. We always recommend that you seek independent financial advice before making any financial decisions.
The value of your investment can go down as well as up and you may get back less than the amount invested.
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