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As women, we know that the pension and savings gap exists, especially for mums who need to take time off for maternity leave and flexible working.
But did you know that when it comes to pensions, savings and investments that the gap suddenly becomes an abyss?
Things are changing. Many of us are trying to take back control of our finances by going back to work so we can put a little extra away in savings or to future proof.
But we need more.
Talking about our own finances is just a small step. The odds as women are still stacked against us as we try and build a healthy pension pot while saving for the future.
Those of us that are self-employed or caregivers are more likely to have a smaller pension pot than their male peers, some even having to solely rely on the State Pension.
Taking back control and building up your investment portfolio will help to ease the gap and ensure that you have a nice pension or savings when you come to retire.
Ways to Ease The Pension and Savings Gap
Easing the financial gap between men and women could come quicker if we all make small changes. That’s why I’m making a pledge with Aviva and their #Planuary campaign to say that I’m going to start putting more away monthly toward my pension ready for my retirement.
So here are 7 ways you can take back control of your money this month and pledge to start boosting your savings and pension pot.
Talk about money
The more we all talk about money the more open subject it will be. Many of us find the idea of investments scary or a pension laughable when you’re trying to feed kids off your part-time wage.
Having a fellow woman sit down and take the myth out of savings, investments, and pensions goes a long way to building another woman’s money confidence up. Could you talk through with a friend how your investments are set up? Or why a pension even if you’re struggling to save is important?
Every small financial step we make can help reduce the gap between men and women’s finances.
Pay into a pension
Many of us will have had gaps in employment due to maternity leave or raising kids. By making sure you are claiming Child Benefit means that you may still be entitled to the State Pension when you retire.
If you’re self-employed, remember to still pay National Insurance as you go, even if it’s not compulsory. As you may find in later life you haven’t paid enough. Please don’t rely on the State Pension though, consider setting up an independent pension account, even a basic one to start with so you start putting money away.
If you do go back to employment then the Work Place Pension is now in place for most employees. This means that you don’t even have to think about it as is gets taken out of your wages before you’re taxed and may grow depending on the investment.
When you can, find out if having an external pension or investment package could benefit you too. Knowing that you’re putting money away now for the future will mean that you aren’t necessarily depended on anyone come retirement.
Invest in your future
As women, we are more naturally cautious, but by investing a small lump sum for a long term could mean a better rate of return then you currently get from your normal savings account. Investments do rise and fall though, so making sure you seek the right advice is key here.
Investing doesn’t have to be scary and you don’t have to have thousands of pounds in the bank. All you need is to be able to commit an amount for at least 5 years and not touch it. The longer you leave it the more money it could make.
There is some risk involved but like everything, you just weigh up the risk depending on where you are in life.
Will you need the lump sum in five years for university fees? Can you really be without it for ten years? How much risk is involved? Ask yourself all these questions first. It’s fine to start small and slowly grow your portfolio as the kids get older.
This goes without saying but by clearing debt you can then pledge to put that money away into a long term savings account or towards an investment later on.
None of us want to think about retirement when we are in our thirties but it’s important that we do.
Take back control of the household finances
Are any bills in your name? Could you manage to take on one or two to keep your toes dipped in the families household budget?
Many of us split jobs to make our home life easier but by not being involved in the household finances means that you may loose track of what’s coming in or out.
If you have a joint account, why not open up one in just your name and pay into the joint account once a month?
Less reliant on a partner
None of us want to think that the worst will happen, like a family break down or a death of a spouse, but knowing that you have your own money and own pension will come as a huge relief.
Track down old pensions
This isn’t easy but if you were employed then you may have had a pension at some point. Track down your old employers and find out so you know what you currently have,
I hope these tips help you to gain more financial freedom and bridge the savings gap that you may already have. Come tell me on Twitter using the hashtag #Planuary what you are going to pledge to do this January to make sure you lessen the pay gap.