According to research by Scottish Widows, 71 per cent of women don’t know what size pension pot they need to provide the retirement income they want and 43 per cent of women have little or no understanding of their individual pension savings. This lack of financial knowledge is particularly concerning given recent pension freedom reforms and also as many small and medium-sized enterprises (SMEs) approach their staging dates for auto-enrolment.
Related: Women need to plan their pension now
SMEs are increasingly recognising the need to educate and prepare their workforce for retirement. Understanding the diverse nature of their employees is essential. Studies suggest women are less confident than men about their financial knowledge, and that they tend to underestimate themselves and their abilities. Women tend to live longer and have shorter careers than men, which means they have a more critical need to make their money last. Their view of wealth differs to men; for women, money enables them to care for themselves and their families, improve their lives and to ensure security.
Yet seeking financial advice is a challenge that faces many women. They are aware that they have not been saving adequately for retirement, but are finding it hard to get suitable advice.
Following a recent survey of more than 2,000 people, 25 per cent of women say they find it awkward talking about their finances face-to-face with a financial adviser. The survey commissioned by Wealth Wizards reveals that women would prefer online pension advice instead.
Surveys of women’s attitudes to financial advice show repeatedly that their biggest bugbear is lack of communication. The financial services industry is failing to connect with women, who are often being ignored or just not given enough information to make proper decisions. This is partly due to the fact that there are so few women in the industry, and partly due to the fact that male advisers are not adapting their approach to financial planning when dealing with female clients. In addition to this, 51 per cent of females deem face-to-face financial advice as too expensive.
So, what can SME employers do to help women in the workplace get to grips with their savings and retirement planning? According to Lynne Graves, head of new business development for corporate pensions at Scottish Widows, this is an area where employers can really help. Women are more likely than men to turn to their employer for information on pension saving, so providing access to tools and information in the workplace can help point female workers in the right direction.
As auto-enrolment approaches, it is the perfect time to open up the communication channels with employees, to understand what concerns they have, and what information you can provide to help them plan their future.
One option to consider for bringing expert affordable advice to staff is to engage an online advice service. So called ‘robo-advisers‘ allow employees to access online services either in the workplace or at home for a fraction of the cost of face-to-face advice.
Since the abolition of the default retirement age (DRA) in 2011, the introduction of auto-enrolment in 2012, and the recent pension reforms providing unprecedented flexibility in retirement, more employees than ever are now facing important decisions that will affect their retirement. Women in particular need help with understanding their pension and learning what they need to do to make sure that their pot is totally adequate for when they retire. Employers must consider the best way of offering support and guidance to their female workers, such as listening to their concerns, providing access to information, along with the introduction of online advice tools. These measures would help address the particular concerns and circumstances of women, to help them effectively plan for their retirement.
Andrew Firth is chief executive of Wealth Wizards.