Coronavirus: Martin Lewis advises on pension savings
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Pension saving is an endeavour undertaken years in advance, with Britons ensuring they are amply protected for retirement. However, undoubtedly, impacts in the present are likely to have a knock on effect in the future. With Britons grappling with the fallout of the pandemic, may have been financially affected, but research has shown it is single women who face the most challenges.
A study undertaken by Fidelity International has shown COVID-19 as creating major saving and investing challenges for all women.
Single women, though, have been hit hardest compared to any other relationship group, with more than a quarter seeing their income fall.
Typical pension savings held by single women at £34,079, are worth just over half the UK average for all savers – at £66,818.
This illustrates a significant disparity which could create difficulties for women in the future.
With more people living as single households, Fidelity is stressing the importance of financial independence.
Maike Currie, investment director for Fidelity International, commented on the matter.
She said: “In the UK, the number of people living alone has increased by four percent during the last 10 years, according to the Office of National Statistics.
“For many, this means holding full responsibility for their finances and financial wellbeing themselves.
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“While this can provide great opportunities for financial independence, it’s also a significant responsibility to shoulder, not least for the 90 percent of two million single parents in the UK, who are women.
“Our research reveals the extend to which the financial gaps between men ad women have been widened as a result of the pandemic, with the impact on single women greatest.”
Now, with many needing to prioritise their day to day finances and recover on income gaps, there are fears about financial certainty in the future.
Ms Currie expressed worry about the gender pension gap potentially being further exacerbated due to the challenging circumstances faced over the last year.
Indeed, long-term savings could also be jeopardised, potentially creating financial chaos later down the line.
Earlier this year, research from Fidelity showed the disproportionate financial impact of the pandemic upon women.
Women were found to be 1.5 times more likely to have lost or quit their jobs during the pandemic.
And women were far more likely to be furloughed, while those who stayed in work often lost productivity due to other responsibilities and pressures such as caring for children or older relatives.
For those who are looking to secure a long-term financial future, Ms Currie urged action as soon as possible.
Firstly, it is important to review one’s financial situation to look at monetary “health”.
While everyone approaches money differently, looking at one’s short and long-term goals while eliminating any unnecessary spending will be key.
Next, it will be important to have some funds set aside “waiting in the wings” for the right moment.
The pandemic created a financial shock for many, and to avoid similar circumstances happening in the future, creating an emergency fund is important.
Generally, experts suggest an easy access fund worth three to six months of money, but Britons can adjust this according to their needs.
Finally, taking a long-term view is likely to benefit individuals in the future – with building a nest egg particularly vital.
Ms Currie concluded: “A monthly investment into a self-invested personal pension or ISA is an easy and tax efficient way to help give you the financial freedom you want for the future.
“This step is even more crucial for women given the gender pay gap and women’s propensity to choose saving over investing.”
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