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How women can boost their retirement savings

More than half (56%) of working-age women over 35, say they have less than £1,000 in retirement savings, new HSBC UK research shows. However, there are ways you can fill a pension shortfall.

Women on average will retire with 80% less money than men, according to the Chartered Institute of Insurers (CII).1 And 31% of women rely on their partner’s pension as their main source of funding in retirement. 

This is putting many women in a vulnerable position, especially if they were to separate or divorce – they may find they have less to retire on than expected.2    

Here, we share insights from retired and non-retired women. Plus 5 things you can do today – to help you create a financially independent future.

More than half of women expect to struggle financially

The study, carried out by YouGov for HSBC, surveyed 1,048 retirees and 2,695 non-retirees in England, Scotland and Wales – ranging from ages 18 to 55+.

52% of women surveyed expect to struggle financially when they stop working. Younger women (aged 18 to 24) are more optimistic about their retirement, with 72% saying they expect to live comfortably. 

Saving for retirement also takes a back seat when it comes to budgeting, as other things take priority. Almost 1 in 5 had to decrease the amount they set aside for their retirement due to the pandemic, and 22% had to do so to support family members.

A third of retirees aren’t living comfortably

When it comes to women who have already retired, over 90% said they need up to £30,000 a year to fund their lifestyle. However, for many women, this is difficult to maintain. 

29% of retirees told us they don’t have enough money to make ends meet. 10% of retirees said their retirement savings aren’t enough to cover household bills and 30% can’t afford to run a car.

Why retirement planning should be on your priority list

Although the gender pay gap is improving, women generally earn less than men overall, throughout their careers – limiting the amount they can save for retirement. For example, women are more likely to take career breaks or reduce their hours to look after children or elderly parents – affecting their pension contributions and retirement income.3  

Life expectancy in the UK has also increased, with women expecting to live into their 80s or beyond.4 So any retirement income may need to stretch further over a longer period of time. This shouldn’t be underestimated. 

The earlier you start saving for your retirement, the more likely you are to:

  • be financially independent

  • have sufficient funds available to support the lifestyle you want

  • be able to cover an unexpected expense after you stop working

5 ways to boost your retirement savings

Taking action feels good. Here are some positive changes you can make today for a more comfortable retirement.

1. Maximise your pension contributions

If you can, now’s the time to add as much as possible to your workplace pension or your retirement savings and make the most of the tax relief from the government. Some employers offer to match your contributions up to a certain limit – if yours does, try to make the most of it. 

You should also check your State Pension forecast to see how much it’s worth. If you've taken a career break, you may have gaps in your National Insurance record, which can affect the amount you’ll receive. It may be possible to make voluntary contributions to make up for these. 

Explore: Our retirement calculator

2. Save more by making small changes

Take a fresh look at your budget to see where you could potentially free up money. The more you save now, the more you’ll have to retire on. 

Explore: Simple ways to save for your future

3. Consider investing

Investing is an alternative way to save for your future that could potentially provide higher long-term growth than leaving your money in a savings account. The key difference is there are no guarantees as the value of investments can go down, as well as up, and you may not get back what you invest. 

At HSBC, you can start investing from as little as £50 a month and lower risk options are available (eligibility criteria and fees apply).

4. Make the most of joint allowances

If you’re married, in a civil partnership or in a stable relationship with shared assets, you may want to look at both your pensions and savings together. Our retirement calculator can help you work out the cost of living together when you’re no longer working.

5. Adjust your retirement plans

If you’re near retirement age and are concerned you won’t have enough money, think about whether you can delay when you finish work. If that’s an option, let your pension provider know as it may make sense to change where your pension is invested. 

Switching to reduced working hours or ‘semi-retirement’ can also give you more financial security, as well as a better work-life balance.

Explore: What to do if you haven’t saved enough for retirement?
 

All figures, unless otherwise stated, are from YouGov Plc for HSBC. Total sample size was 1,048 retirees and 2,695 non-retirees, ranging from ages 18 to 55+. Fieldwork was undertaken between 5th and 6th January 2022. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).