New research suggests women are likely to be hit hardest by the retirement finance reforms announced in this year’s Budget, as they are less likely than men to seek or value financial advice and also less aware of the products and services available to them. Despite the new pension’s freedom, the research suggests women may fail to make the best decisions about financing their retirements.
The research reveals that only 40% of non-retired women aged 55+ say they would value expert financial advice when retiring, compared to over 52% of men aged 55+. This is despite women being more worried than men about not having enough money to make ends meet in retirement, with half of UK women saying this is a concern compared to two fifths of UK men.
However, almost half of women aged 55+ say they are unaware of the products and services available to them to generate retirement income, compared to just a third of men aged 55+. Women aged 55+ are particularly confused when it comes to additional pension income that could be available, with less than one in five aware that annuity providers offer additional income for certain medical conditions. In addition, women approaching retirement underestimate their life expectancy by an average of 10 years, considerably higher than men’s underestimation of five years. Despite this quarter of retired women admit to spending no more than a day planning for retirement.
Andrew Tully, Pensions Technical Director, MGM Advantage commented: ‘It is worrying that women don’t seem to value expert advice to help them plan for their retirement as much as men do and are likely to make decisions about financing their retirement by themselves, with some spending little time making these life-defining decisions.
‘The recent reforms have given retirees more freedom and increased their choices, but this means decisions are more complex so understanding the options available is more important than ever. There is a real risk that without expert advice, people approaching retirement, especially women, may receive a poorer outcome than before the reforms.
‘We need to ensure anyone taking decisions about their retirement takes advantage of the guidance that will be available with well signposted hand-offs to financial advice.’