Doubt is creeping into the minds of millions of people in the UK at a time when it is often too late to salvage their retirement finances. What’s more, there is a stark and troubling disparity between the state of the retirement finances of men and women, and the confidence, or lack thereof, which this facilitates. For many women, the horse has well and truly bolted, but there is a chance to return to stability.
According to Aviva's Real Retirement Report: 'women are significantly less likely to be confident that their finances are fit to retire (34%) than men (51%)'. This lack of confidence has been exacerbated by the fact that women over 45 have around 20% smaller monthly incomes than men - the average woman earns £1,414 a month compared to their male counterparts £1,761. Smaller incomes for women lead to a predictable result: smaller savings. Once again, according to Aviva, the average woman will have £42,283 in savings and investments but the average man will hold £54,845: 23% more!
Despite gender equality becoming a central issue in politics at Westminster and closer to the centre of politics in society at large, the damage has already been done and many women approaching retirement in the next few years are in a much worse position than the average man. According to Prudential, as many as 21% of women have no pension savings whatsoever, compared to 9% of men. So, there will come a point when some women simply run their savings dry and have to rely solely on the State Pension or the charity of others. However, help may be at hand as products in the equity release stable can assist in releasing housing wealth and can hopefully facilitate a return to a position of financial comfort.Moreover, the lifetime mortgage can also provide the kind of financial independence that can have invaluable social and even physical benefits.
With the average woman living until around 83, and the average man only living to around 78, there is the unfortunate reality that many women will live on alone for years after their partner has passed away. It is logical, therefore, that women should be saving considerably more for their retirement, but the reality is they save considerably less. It is true, of course, that these same women may receive inheritance from their deceased spouse in the form of savings, but it is another, more valuable asset that could come to the rescue. An asset that will have most likely been their most sizable and successful investment: their home.
The family home can add a level of comfort both financially and emotionally. For those women who live on into later life without their husband or partner to assist with financial matters, stress and worry can quickly reign. With bills piling up, retirement can become much more stressful than working life. However, many clients we advise at Bower Retirement often explain how they are extremely happy, and indeed relieved, that there is a product available that can help them experience new things in retirement, make longed for home improvements, take a well-deserved break abroad or just simply pay the bills,all without ever having to move home and leave their memories behind.
The earnings gap between genders must narrow, and both men and women must also put more money away throughout their working lives as retirement is becoming a completely different experience due to the continued advancement of life expectancy. However, it is of great solace to many people who currently benefit from their consistentlyincreasing house values, that products like the lifetime mortgage exist and are able to deliver the money they often desperately need without the need to downsize. Record breaking numbers of homeowners are accessing their housing wealth and for those who may be alone in their later years and begin to fret about their finances, equity release is serving as an invaluable lifeline.
