The state pension age for women will rise to 65 years, the same as that of the man from 6th November. Telegraph money with Kay Ingram of LEBC has recommended these 8 steps that women can follow for a better retirement:
1. Gender pay-gap in Pension: Women's finances are hit twice as a result of the gender pay gap employers and employers' contributions are on an average £47,000 less for women. Be it a temporary position at workplace or a low salary always enrol in the workplace pension it is yours to take away.
2. Avoid taking a break: Saving has dropped among pregnant women in the age group of 35-44 years. These women feel pressurized to stop their pension contributions in preparation for the end of maternity pay. Once the baby is born, statutory maternity pay is received while the employer pension payments continue.
3. Fair divorce: Divorce is common among couples over 60s. Generally court rulings order for pension sharing between the couple. However, three quarters of divorcing couples fail to take pensions into account.
4. Life-expectancy: Studies show that on an average women live 3.7 years longer than men up to 83 years and so, need about £13,400 a year for expenses.
5. Consult Financial advisers: Knowing the current valuation of your pension helps understand the amount of your savings. Consult a regulated financial adviser to review your pension and if you're above 50 years old then you can be eligible for free guidance as well.
6. State Pension Drawbacks: 35 years of National Insurance credits is required to receive the full state pension. Career breaks and vacations can obstruct your entitlement. But if you're not working and claiming carers' allowance or parent's child benefits, NI credits are covered.
7. Get married: Unmarried couples are not entitled to state bereavement payments or private pension even if they are financially dependent on their partner. And in the absence of a will, when one dies, the other will not have any inheritance. And if they leave you assets greater than £325,000, a 40pc charge will be due on the excess wherein the spouse exemption from the inheritance tax won't apply either.
8. Risk it: A man's average pension savings is £212,000 greater than the women's at £132,000. The man's savings are invested at 3pc return which yields them an annual income of £6,360. This means that the women needs to risk investing her savings at 5pc return to be at par with the annual income of her male counterpart. Holding too much cash is a dead investment.