Things every woman should know about pensions

The world of pensions can seem distant, daunting and often irrelevant when many of us are concentrating on the now - paying our bills, getting on the property ladder or paying our mortgage and trying to have a social life. But financial experts are warning that it’s more important than ever for women in particular to prepare for their future so that they’re not financially vulnerable in old age.

The facts are stark: the 2008 Scottish Widows Women and Pensions Report revealed that over half of women (54%) are not preparing adequately for their retirement. Yet there are compelling reasons why women should think seriously about how they are going to fund their retirement and put plans in place: they live longer than men, earn less on average over a lifetime, take time out of work to have a family and put their children first and their own financial savings second. Women are also more likely to be financially dependent on a spouse which, with higher divorce rates, means a large proportion of the female population face an uncertain financial future.

So, whether you’ve buried your head in the sand when it comes to your pension or are simply unsure about where you stand, Scottish Widows pension expert Alison Morris has the following advice for women:

If you’re 20 now, and studying

• Try not to build up too much student debt. Remember an interest free overdraft is not free money, you’re going to have to pay it back at some stage

• When you start work try to put something aside each month, perhaps in an ISA. It’s good to get the savings habit!

• Decide what your financial priorities are, short and long term. Holidays? Buying a house?

• Pension probably won’t be a priority, but find out if your company has a scheme. If you join, there’s free money from your employer and from the Government

• Remember your parents or grandparents can pay £3,600 a year into a pension for you. Worth dropping a few hints?

If you’re 30 now, with no kids

• Join your company’s pension if you can, for free money from your employer and the Government on top of what you pay

• You should be saving about £1 of every £8 you earn (including anything your company puts in).

• Save regularly now, and you could end up with twice as much at 65 as starting to save the same amount at 40

• Remember you’ll get no pension from the Government until you’re 67. If you retire before then, you’re on your own

• If you retire at 65, you could live another 25 years on average. Save now for a comfortable retirement

If you’re 40 now, with a family

• Work out your financial priorities – current spending, saving for your kids, saving for retirement. Don’t neglect yourself!

• If you’re employed, join the pension scheme. If not, remember your partner can pay in £3,600 a year for you

• Don’t rely on your partner’s pension – he might not be around when you retire

• Saving for retirement doesn’t have to be in a pension. ISAs allow you to save but can take money out in emergencies

• Remember you’ll get no pension from the Government until you’re 66. If you retire before then, you’re on your own

If you’re 50 now, with kids leaving home

• Make a list of all the jobs you’ve had and find out how much pension they might give you

• Encourage your partner to do the same to find out your likely joint income (or how much you might get if you divorce!)

• Try to estimate what you might get from the Government – will you have worked for at least 30 years when you retire?

• Remember you’ll get no pension from the Government until you’re 65. If you retire before then, you’re on your own

• Speak to a Financial Adviser to find out what your options are

Things you can do at any age

* Do your homework on pensions. There is a great deal of impartial information available at,uk, and If you are not sure what to do, obtain advice through your bank or an independent financial adviser

* Visit for a range of easy to use pensions and budget calculators and beginners guides. The personal budget calendar can summarise your income and expenses to see if you have any money left over at the end of the month and the Quick Pensions Calculator can help show you how much money you need to put away to get the income you’d like in retirement. The Pensions Decision Maker is another handy tool that can help you to decide the next steps to take in terms of saving for your retirement

* To get a state pensions forecast, contact the Department for Work and Pensions – you can fill in your details online at in 15 minutes. It should calculate your likely income. Obtain an estimate of what you might get from pension arrangements of any current or past employers. If you have difficulty tracking down an old pension, there is a tracing service available through The Pension Service website. Also check with your current employer to see if you can get a combined forecast. Your company’s Human Resources department may be able to help you