Doubts over long-term financial security for women
New research suggests that a fundamental shift in priorities for women in their thirties is causing them to grow increasingly concerned about their financial future.
The research by Scottish Widows found that, at the age of 30, nearly four in 10 women are feeling optimistic about their short-term finances.
This confidence is reflected in their actions; 30 year old women are saving an average of £1,790 over the past year, more than hitting the average savings target of £1,736 a year by this age.
However, despite some positive signs in the short-term, this optimism appears to be marred by concerns about long-term finances.
This could be due in part to a rise in the average age when women are having their first child.
Over half of babies are born to mothers aged 30 and over, with 30.2 now the average age for a woman to have a child.
As a result, women at age 30 are on the brink of a major shift in their financial priorities – and of course their capability to save for the future.
The research found that concerns about the financial pressures of raising a family are leaving more than a third of women feeling pessimistic or very pessimistic about their long-term finances.
Nearly six in 10 women are feeling pessimistic about their retirement, compared to a UK average of just 34%.
A quarter of women at 30 also expect to have a big shortfall in pensions savings.
These financial concerns for the future become more acute as women settle into motherhood.
Nearly a third of women at age 30 think they are more likely to save for retirement during the next year, compared to the amount they currently save.
By the time they reach their 35th birthdays, a time by which over half of women have at least one child, other financial priorities reach the top of the list. Only 12% of women at age 35 expect to start saving more for their retirement.
The research findings suggest that concerns about building sufficient income in retirement are also fuelled in part by a lack of engagement with pension saving.
More than six in ten women at 30 do not feel very comfortable managing their pensions, savings or investments.
A fifth of women at age 30 have no idea of the extent at which their savings will meet their retirement income needs
Commenting on the research, Jackie Leiper, Retirement Expert, Scottish Widows, said:
“It’s great to see so much financial engagement amongst women at the age of 30, but we must work harder to prevent those positive habits from dwindling when women have children.
“Our research clearly signposts a tipping point at this age, proving how important it is to support women as they learn to balance their growing list of priorities.
“More support – through better education about pension saving and more targeted engagement – is vital to ensure women are not worrying that having a family means sacrificing their own financial security.”
Sam Smethers, Chief Executive of the Fawcett Society, said:
“Women take a big hit on their finances when they have children, both in the short and long term, as they often put the needs of their family before themselves.
“Whilst thinking about pensions at the age of 30 might feel premature, it is vital that women consider their own pension provision when they have children, rather than relying on a partner. Otherwise they risk poverty in retirement.”