Nov 14, 2023 | MARIE SMITH
With the gender pay gap to overcome and for some, the maternity or caring penalty – it’s no wonder women have less saved for the future than men. Life admin can get in the way, particularly if you run a household, a successful business or both!
Despite living longer, by the age of 60-65, women’s pension pots are just over half the size of men’s. [1]
But there is lots you can do to fix this, and here are some tips to take back control.
#1 SET YOUR PERSONAL FINANCIAL GOALS
Before doing anything about your finances, it’s important to set yourself financial goals. Make these realistic, achievable and give yourself a timeframe. For example, I want to retire at age 60 with an income of £60,000 per annum, or I want to support my children through private education at a cost of £15,000. The more specific you are about your goals, the more achievable they will become and the easier it is to plan.
#2 SET UP AN EMERGENCY FUND
It’s really annoying when you get an unexpected bill and need to find the cash from somewhere. New boiler or roof repair? It’s a pain.
Have at least 6 months’ of normal living costs tucked away in a high interest instant access saving account. If you can’t afford to save large sums initially, set up a standing order or direct debit for what you can afford – it’s amazing how quickly your pot will grow.
#3 INVEST FOR THE LONG TERM
To see real growth, you want your money to grow at least at the same pace as everything else (inflation), and this is where investing helps.
When you invest, your returns aren’t fixed – instead, they depend on the performance of your investments. So, there’s a risk you could get back less than initially invested. However, over the long-term (10 years+), investing has outperformed returns from cash over 90% of the time. [2]
Investing doesn’t need to be daunting – there are lots of advisors and self-service platforms, but due diligence is key, and keeping costs low. If you’d like a bit more info on some things to think about when investing. You can request a copy of our guiding principles to investing here: PortfolioScience: Download page – Cooper Parry Wealth
If you have an investment portfolio already, it’s important to review it, to make sure it’s working for you. Do you know how you’re invested or how much you’re paying, is it set up to deliver what you need? If you don’t know the answers to these questions, best to take advice.
#4 MATERNITY BREAK?
Take time during any maternity leave to get your budget in order. Track your expenditure and pick up any bad habits.
Can you spread your maternity pay out? Even if it isn’t in your company policy, it’s worth asking.
Once your child is born you can usually claim Child Benefit. With this setup, you will receive a regular payment. Although it’s not huge, it will go some way towards making up the difference. Plus, you’ll get national insurance credits towards the State Pension which is really important.
If you (or your partner) earn more than £50,000 a year, you will usually still be entitled to the full amount of Child Benefit, but you will have to pay some of it back. This is known as the ‘high income Child Benefit tax charge’.
Also look into childcare support, the following article is a really useful guide:
#5 ARE YOU PROPERLY INSURED?
Last but not least, it’s really important to plan for the worst. What if you or your partner died or were unable to work through ill health? Would the mortgage get paid off? How would you cope financially? Would you have to sell the house? Is your business fully protected? What if you lost a key employee?
This is where insurance is critical. You pay a monthly premium for a level of cover right for you. You’ll be glad you have it if you need it.
And the final questions are, what action are you going to take now? Have you got everything covered? Are you neglecting your future plans? Do you need help to get your financial house in order? If you’d like a free informal chat, please get in touch. We’d love to hear from you.
Marie Smith
Associate Partner
maries@cooperparry.com | 07887473147
[1] https://www.aviva.com/newsroom/news-releases/2023/03/pension-pots-of-women-just-over-half-the-size-of-men/
[2] 2019 Barclays Equity and Gilt Study
Investing money puts your capital at risk. Past performance can’t guarantee what investments will do in the future. The value of a portfolio can go down as well as up, so there’s a chance you’d get back less than you put in. Any information contained within it is the opinion of the author and nothing in this document should, under any circumstances, be considered to be advice. You are recommended to seek competent professional advice before taking any action.
Tax and estate planning advice are not regulated by the FCA.
This information represents our understanding of law and HM Revenue & Customs practice as at (11/09/2023) and may change if legislation changes.
Cooper Parry Wealth is a trading style of Cooper Parry Wealth Limited, which is authorised and regulated by the Financial Conduct Authority. The Financial Ombudsman Service (FOS) is an agency for arbitrating on unresolved complaints between regulated firms and their clients. Full details of the FOS can be found on its website at www.financialombudsman.org.uk. Registered in England no. 04220777. Registered office: Sky View, Argosy Road, East Midlands Airport, Castle Donington, Derby, DE74 2SA
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