12th March 2015
Women are dramatically underestimating the amount of pension savings they require in order to secure a comfortable retirement according to new research.
The BlackRock Investor Pulse survey found that on average women would like an annual retirement income of £20,255 and think a pot of £114,900 should fund this. But to hit their goal they actually need a nest-egg of £405,100 – underestimating the amount they need by £290,200.
In addition the analysis found that only 54% of women have started to save for retirement and nearly half, at 47%, are not confident they are saving or investing enough to ensure that they will live comfortably throughout it.
Perhaps understandably then, saving for retirement at a younger age was advice that almost half of women said they would give to their younger selves.
Sarah Melvin, chief operating officer for EMEA retail at BlackRock said: “Saving for retirement earlier is an important topic that should be discussed with younger generations. A quarter of women have said that having a retirement plan in place would make them feel more in control of their financial futures.”
Melvin highlighted that there are a few simple steps that women who have not started to save for retirement should consider, such as; decide how much income you would like per year in retirement, have a plan, make the most of tax efficient vehicles like ISAs and pensions, and think long-term about money.
She added: “This last point is particularly pertinent with younger generations who can take into account their long investment horizon and seek out effective ways in which they can put their savings to work in order to provide an income.”