Women & pensions - time to get serious

Getting to grip with life policies


The age at which people can start to take the state pension is changing and women are particularly affected. Until 5 April 2010, women were still able to receive a state pension, but a woman currently aged 45 now has to wait until she is 67 for her state pension.

Some studies show that women can be better money managers than men because they tend to be more conservative and do their homework. However, a recent Scottish Widows ‘Women and Pensions’ report (October 2013) stated "by the time they retire, 41% of women have realised they didn’t prepare adequately compared with only 24% of men".

Status is immaterial

Single, separated, divorced and widowed women are in no different a position from a man when it comes to the need to provide for adequate income in later life. Any woman or man relying on state pension benefits alone will be in for a great disappointment.

Married women and those in civil partnerships or long-term relationships, may be relying on their partner’s pension to provide for them as well. This ignores the possibility of their partner’s death, or even divorce, separation or one of the many other potential major upheavals in life.

A divorced woman may now receive some pension benefit if her former spouse or civil partner had a pension. However, this is most unlikely to be anywhere near the real value of the income in retirement that she might have expected if they had stayed together.

Redundancy of a spouse or partner

Women planning for their future also have to contend with the redundancy of a husband or partner, or the failure of their business. In such events pension contributions naturally cease and any resulting pension would be very much reduced.

Tax savings

There are often sound reasons in many families for ensuring that both spouses or partners have pensions. It is still common to encounter wives who have little or no income in retirement and are therefore not making full use of their personal allowance, under which currently the first £10,000 of their income is tax-free (subject to age allowance and reductions for high income levels). A wife or partner who is able to produce a pension (including her state pension) of up to £10,000 a year, in present day values, will receive every penny. We are here to advise you should you need help with pension planning.

The value of your investment and the income from it can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Any levels and bases of, and reliefs from taxation, are subject to change. Tax and pension laws can change.


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The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.