26th May 2014
Women are having to work for four years longer than planned as they cannot afford to retire, and their financial situation is worsening.
The inaugural Woman & Money Report by Savvywoman.co.uk reveals the ideal retirement age for women is 62, compared to 63 for men, but most expect to work until they are 66. A further 6% of women believe they will not be able to retire until age 70.
Older women traditionally have low levels of workplace and personal pension saving meaning they rely on the state pension to fund their retirement. However, over recent years the age at which they will receive the state pension has been increasing from 60 to 65, to equalise with men in 2018. After this the state pension age will increase to 66 in 2022 and to 67 in 2028 but the government has put measures to review retirement age against longevity meaning it could rise to 68 by the mid-2030s and again to 69 by the late 2040s.
The shifting goalposts have made pinpointing a retirement date difficult for women, and the report reveals a third have no idea when they will be able to retire, compared to 15% of men.
Unfortunately for four in 10 women the chance of saving more and retiring earlier seem bleak as they report feeling worse off than a year ago and only 3% of women describe themselves as feeling a lot better off than a year ago.
However, for younger women there is some optimism about finances, with 31% of 18 to 34 year olds saying they felt better off.
Sarah Pennells, founder of Savvywoman.co.uk, said positive economic news was not filtering down to the women in the survey who on the whole are feeling worse off than in 2013.
‘State pension reforms are a huge issue for women, and Savvywoman users have been particularly vocal about the forthcoming rise in state pension age to 66,’ she said. ‘I’m not surprised that women think they’ll have to retire later than they’d like to, but the fact that they think they’ll have to wait for an extra four years on average, until they are 66, is pretty worrying. What’s also alarming is that almost a third don’t know when they’ll be able to retire.’
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