Research suggests that men are three times more likely to seek financial advice at retirement than women. Amongst our clients, we have a split of around 40% women and 60% men which does indicate that the benefits of financial advice are not being sought by women as much as men.
Why are women less likely to seek financial advice?
A recent report by Fidelity on the barriers to women investing, found that some of the key barriers to women investing are time, confidence and access to the right information.
How do financial advice needs differ for women?
Women may have gaps in earnings which can impact State Pension entitlement and reduce the value of pension pots. Auto-enrolment of workplace pensions has encouraged investment, but often women do not benefit to the same extent. There has been plenty of coverage around the Gender Pay Gap which is on average around 18.4%, but the consequences of this also impact future wealth levels for women. In the run up to retirement, women’s pension pots are only worth 50% on average of pension pots for men aged 55-64.
Protection needs of a household can be overlooked, by focusing on the main earner in the household. Married couples and partners should consider the impact of either person suffering ill health or death. Any impact on the capabilities of lower earners or non-earners will still have a significant impact on the household income. The active partner may have to take on the day to day household tasks which may include looking after children or older parents, tasks which are generally carried out by women, which could limit the earning capacity for the household. The Office for National Statistics (ONS) estimates that 65% of women in couples are in work and 93% of men are in work.
Life expectancy is a further factor as 7 in 10 people aged 90 or over are female. So women do have a greater need to be financially independent. Changes in UK society also reflect greater financial independence of women and the ONS report an increase of people who were not cohabiting, never married or civil partnered from 22.9% in 2002 to 25.0% by 2015. Single people need to consider their own protection needs in the event of ill health or disability which could impact their earning potential and their ability to provide the income they need to maintain their lifestyle.
Women are much more likely to be employed than in the past with 72% of women aged from 16 to 64 now employed, compared to 80.2% for men. Women are also taking up more self–employment opportunities. Historically, women have made up just over a quarter of the self-employed, but since the 2008 downturn 58% of the newly self-employed have been female. Life cover or other protection policies are often provided by employers, but self-employed clients need to protect themselves and their business from ill health, disability or death. These changes are giving women their own financial independence and raises the importance of financial planning and getting regulated advice.
What financial planning opportunities are there?
Tax planning opportunities exist for both men and women, but women tend to have a more cautious outlook and seem to have less confidence in making investment product choices, often favouring Cash ISAs rather than Stocks and Shares ISAs. Men are twice as likely to invest in a Stocks and Shares ISA than women. However, there is some encouragement from younger women aged between 18-34 who are more likely than men to invest in Stocks and Shares ISAs, giving their investments the greater potential for growth over the long term.
Asset ownership is also another way to reduce your household tax bills, by structuring asset ownership tax-efficiently so income is taxed at the lowest rate within the household.
Women are often risk averse with money, but they are more likely than men to provide financial guidance to their children or family and men are more likely to speak to their partners about money – so there is a solid foundation to build on.
You can read the Fidelity report ‘The financial power of women’ to find out about the barriers to women receiving financial advice and the opportunities.
Our approach to advice
We often assess retirement income and financial planning on a household basis, but each individual should take control of their own financial future so that they can meet their retirement income expectations.
Every person can benefit from financial advice, whether it is to grow, protect or preserve their wealth or get the most out of their assets. Our advice services reflect the needs of our clients whether they are married, in civil partnerships, living on their own or single parents.
We take the time to understand the financial planning needs of each client, reflecting their financial goals and explain financial jargon so that our clients understand the risks and benefits of investing. Each adviser-client relationship is tailored and reflects your investment knowledge and experience. We have many female financial advisers based across the UK who support our clients towards their financial goals.
If any friends, family or colleagues could benefit from our advice services, please ask them to contact us. We aim to provide clear information and advice to help our clients to make informed decisions about savings and investments, protecting your family, maximising your retirement income and your assets. CA4562