On average women earn less, spend more time out of the workforce caring for children and live longer than men, so it is no surprise to hear they are less prepared for retirement than their male counterparts.
The increases in women’s State Pension age in particular, designed to bring it in line with that of men, has exacerbated this gender divide, making more than a million women in their early sixties poorer, according to the Institute of Fiscal Studies.
To make matters worse, 20% of women aged 55 to 65 have no savings for retirement, compared to just 12% of men, according to figures from pension provider Aegon.
But there are smart steps you can take to get your retirement planning back on track.
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So, if you think you are on the wrong side of the gender retirement readiness gap, act now.
Build up your State Pension
Unless you are very rich, the State Pension will be the cornerstone of your retirement saving plan.
Research from the Pensions Policy Institute back in 2014 showed that the average State Pension received by men was 16% higher than women.
This is because the system has in the past penalised those off work looking after children or working in part-time roles not paying enough to entitle them to credits –scenarios more likely to impact women – because of gaps in their National Insurance contribution history.
Fortunately, rebuilding State Pension entitlement is one of the cheapest and most efficient ways to get your retirement planning back on track, provided you have some spare cash.
The rules are different depending on whether you come under the old system – which applies to people who reached State Pension age before April 6, 2016 – or the new one.
The old system applies to women born before April 6, 1953.
It is easy to find out if you are on course for a State Pension lower than the maximum £159.55 a week.
Contact the Department for Work and Pensions to find out whether you are entitled to buy back more years – to take you towards the £159.55 maximum.
They will speak to you on the phone and tell you where you stand, or you can fill in form BR19 to get a detailed written statement from them.
If you fall under the old system, you can buy an extra qualifying year of National Insurance contributions for £741, which will boost your State Pension by £211.99 a week.
Under the new system £741 will buy you an extra £237 a week.
Extra years NI is the cheapest guaranteed income on the market – you only need to survive four years in retirement to come out ahead.
Save in a private pension
When it comes to private pension savings, it is important to work out what you have, and what more you will need.
Add up your essential outgoings to work out a target – if you own your own home and will have cleared your mortgage by the time you retire, you will probably be looking at around half to two-thirds your current income.
Thanks to automatic enrolment, increasing numbers of women are now saving into pensions.
If you are lucky enough to have built up substantial defined benefit pension then you should be on track.
But basic contribution levels into modern defined contribution plans offered through the workplace are often pitifully low.
Use a pension calculator, such as this government-approved one to see how much you need to contribute to achieve your target income.
The amounts demanded can be dishearteningly high, but do not be put off by this.
It is far better to pay in what you can – remember you are getting tax relief too – to make a start in building your retirement fund.
If you live with a partner, have a frank conversation about what their retirement plans are.
If you are a higher rate taxpayer, pay as much as you can afford of your income above the higher rate threshold, meaning income above £45,000, into a pension.
If you are a higher rate taxpayer in a workplace scheme, check with HM Revenue and Customs that you are getting the full 40% tax relief on your pension.
Defined contribution pensions run by insurance companies only give you 20% tax relief as a matter of course – you may have to specifically ask for the other 20%.
Sensible family financial planning
When working out your financial plan, make sure you are sorted before you try and help out others.
Women naturally want to make sure their children’s school or university fees are sorted, or want to help with a house deposit.
But however strong the maternal urge to provide for your offspring, make sure you have provided for yourself first.
Your children have time to build up their own finances, and they won’t love you for it if you become a financial burden when you are elderly.
Many of us will inherit money from our parents, and it can be tempting to think of this as a retirement saving get-out-of-jail card.
But bear in mind that much of your parents’ wealth might be consumed by the cost of long term care, or they may decide to give it to a charity rather than to you.
What’s more they might live longer than you expect, leaving you waiting into your seventies before you get the money.
Women going through divorce should remember that a pension can be the biggest asset in a relationship – even more than the matrimonial home in some cases.
The value of final salary or defined benefit pensions has soared in recent years, with some schemes valuing benefits at 40 times the annual income.
That means a final salary pension of £20,000 a year could be worth £800,000.
If you are going through a settlement, don’t just assume the family home is the prize asset – the pension could be worth more.
Courts can order pensions are split between parties.
Make what you’ve already got work harder
Trimming your expenses is another way to get your retirement plan on track.
Look at your bank statements for the last year and add up how much you are spending on shopping, coffees and other discretionary spending.
If what you see shocks you, try to instil some discipline into your spending habits.
Setting up that direct debit to a pension plan may leave you with less to spend today, but you will thank yourself tomorrow.
You may even find some of the things you have spent your money on can bring in substantial amounts of cash.
Designer handbags, jewellery and shoes in good condition can fetch hundreds and even thousands of pounds on eBay – just make sure you have the discipline to put your profits into your pension pot.
Many people are tempted to think of their house as a potential retirement nest egg. But the costs of moving and the price of smaller alternatives can mean downsizing can release less than you think.
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But that does not mean you can’t make money out of your home. You can earn up to £7,000 a year tax-free by renting a room in your home.
New letting sites such as Airbnb are free to advertise and easy to set up, and can give you ready access to lots of potential renters.
Channel that money into your pension pot and you will get closer to your savings target.
Whatever your situation, the essential thing is to have a plan. Without a plan you are unlikely to do anything.
Finding out just how much you will need to deliver a comfortable retirement can come as a shock if you have left it late.
But the worst thing to do is bury your head in the sand.
And by making a number of small changes – around State Pension, trimming your outgoings, maximising your assets and diverting the proceeds into your own plan, you will start to get back on track.
ANNA SOFAT is the managing director at Addidi Wealth, the financial planning company specialising in female finance.