When it comes to investing their savings during their retirement years, women are considerably more cautious than men says new research.
Figures from Sanlam, the advice-led wealth management business, show that nearly one in three women (30%) want to take no risk at all in retirement.
Other findings include:
- women aged over 55 are risk adverse with money, avoiding investing their savings during their retirement;
- despite women living longer and often having smaller pensions pots than men, they are less likely to try to grow their savings significantly once in retirement, instead placing savings into cash ISAs
- 57% of over 55s will take only low or no investment risk with investment in retirement.
The research also found that only 24% of men aged over 55 plan to take no risk at all with their retirement savings. This shows that by comparison, men are braver with their retirement investments and have a bigger appetite to grow their money further once they stop working. What’s more, one in five (20%) are prepared to take on a medium-high level of risk, to grow their investments, compared to just 14% of women.
As regards over 55s and their top investment products, nearly a quarter of men (23%) plan to invest in stocks and shares, and a further 13% will invest in buy-to-let property. Whereas in comparison, only 14% of women would consider stock market investments and less than one in ten (9%) would take advantage of buy-to-let investments.
Jan Sullivan, Wealth Planner, Sanlam
Jan Sullivan, Wealth Planner, Sanlam: “As restrictions on access to pension pots have now been removed, both women and men need an investment solution that meets the risks of retirement. The cost of living, coupled with longer life expectancy, needs to be carefully considered to ensure people have enough money to last them for the rest of their lives. Unfortunately many people do not understand that the biggest risk could be to do nothing at all with their money.
“The new government, with the support of the financial planning industry, needs to do much to communicate the considerable uncertainty around the length of life to consumers, and its impact on the potential sustainability of their retirement income.”
Andy Cumming, Head of Advice at Close Brothers Asset Management
Andy Cumming, Head of Advice at Close Brothers Asset Management, commented: “People are naturally cautious with the wealth that they have accumulated over their lives, but in the present environment, the biggest risk to funding retirement is to do nothing with it at all, or failing that, place it in low interest cash savings accounts.
“Longevity continues to climb – a cause for celebration in its own right – yet it means that retirement savings will need to last for longer than ever before, at a time when annuity and savings rates are bumping along the bottom. To ensure savings to do not diminish too early, consumers need to understand the benefit of staying invested, and how much risk they need to take on to be exposed to enough growth to avoid their savings dwindling early in retirement. This is where marrying a financial plan and a long-term investment strategy comes into its own.”
Peter Bradshaw, Selectapension National Accounts Director
Selectapension National Accounts Director Peter Bradshaw commented: “It’s concerning that so many women may come financially unstuck in retirement if they have not planned for what could be 30+ years in retirement. One hurdle to ensuring women have enough savings for their later years is the fact that many do not seek financial advice. Our data has found that men are much more likely to seek paid-for professional advice than women.
“Even in the younger age group, we found men aged between 22-29 made up 73% of Advisers’ pension review activity in 2014, meaning only 27% of all 22-29 year old clients were women.
“As an industry, we can help ensure an appropriate level of risk is taken which balances protecting retirement savings and ensuring investors have enough money to last their whole retirement.”
