Nearly half of women rely on joint savings to fund retirement
Nearly half (43 per cent) of women are relying on joint savings with their partners to fund their retirement, according to the eighth annual Scottish Widows Women and Pensions Report. However, with one in three marriages in the UK now ending in divorce by the fifteenth anniversary [1], experts are urging women to make extra provisions for retirement, to avoid facing financial uncertainty in old age.
Based on a sample of 5,200 adults, the report found that less than one in five (17 per cent) of women trust their own savings to see them through retirement, compared to nearly a third (30 per cent) of men.
Precarious plans
Despite many women being dependent on their partners for their income in old age, the report finds that these precarious plans are often left unsaid. The vast majority (79 per cent) of married women say that retirement was not discussed with their partner before they walked down the aisle and 78 per cent said they did not know what they would be entitled to from their partner’s pension if they divorced.
Losing out
Furthermore, out of the divorced women surveyed, just 15 per cent said pensions were discussed as part of their settlement. This is in spite of it being a legal requirement that pensions are taken into account in divorce settlements, through methods such as offsetting, earmarking and sharing. This is especially significant, as women are more likely to work part-time or have caring responsibilities for family members, meaning that they are at greater risk than men of losing out on important retirement income.
Exposed to hardship
The impact of divorce on women’s retirement is especially concerning considering that almost one in ten (8 per cent) of women over 50 are wholly dependent on their partner’s savings to fund them in retirement. This report uncovered that this group of older women are particularly vulnerable in terms of lack of retirement provision, with the number of women over 50 without a pension nearly double that of men of the same age (28 per cent versus 15 per cent). As the divorce rate in the UK continues to rise, this group of women could be exposed to hardship in retirement should they separate from their partners.
Unforeseen events
We know that the pressure on household budgets and the challenge of managing childcare and wider family responsibilities whilst balancing work, can all make it more difficult for women to save for retirement. For many older or divorced women, this can mean relying on a partner or other family members to provide support or additional income in later life. However, unforeseen events can have a stark impact on retirement plans, and it is important for women to make sure they know what they are entitled to and how much they can expect to receive in retirement.
For this group of women, it is important to act now. Making a commitment to save a set amount each month, could mean the difference between a comfortable retirement and one full of financial difficulties.
[1] Office of National Statistic’s Divorces in England and Wales 2009/10. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 5,200 adults. Fieldwork was undertaken between 4th – 11th March 2012. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18 years plus).
