My whole life I have always been fiercely independent, and being financially independent is really important to me. Hence I have always worked full time, even when I had my daughter, even though most women will opt to work part time or take time out of work altogether.
Working on the Insuring Women’s Futures programme has made me really think about why I appear to have bucked the trend and therefore am lucky NOT be caught by the perils and pitfalls that impact many women today and unwittingly, create a significant long term impact on finances especially retirement savings.
So I find myself reflecting on my childhood. My parents divorced when I was 6, which back in the 70s was relatively uncommon and my mother was forced back to work after giving up work to have me. I watched her struggle with money trying to make ends meet, and her way out of that was to get a job and work and to manage every single penny carefully. So my sister and I were both brought up expecting to work, expecting to be self-sufficient and also that saving up was the way you achieved the nicer things in life.
So I have always had ‘money objectives’, I bought my first house when I was 21, I have always saved what I can afford, I have always been lucky enough to be in a decent workplace pension and have always pushed myself to save as much as I can. I am instilling these habits in my 19 year old daughter who has an everyday savings account she uses for special purchases but also an ISA that I opened for her with money she inherited when my Dad died and that, along with other money we have saved from her child benefit, will be her deposit for her first house.
So what are my main take aways from IWF? Many women don’t make deliberate mistakes where money is concerned, they are just not aware of the long term consequences of decisions made at those key moments, ie working part time, getting divorced, changing jobs and the statistics are just overwhelming! The fact that resonated for me was that 48% of women, who are divorced and have children (my Mum!) are expecting to rely mainly on the state pension in retirement. It’s just not good enough.
What are my main tips?
- Talk openly about money as a couple, in a family and plan together
- Create a savings habit as early as possible - even a small amount is better than none - and do the same with your children
- Check what your employer will pay into a pension and maximise the contribution from your employer (many pay higher %s if you match)
- Set some financial goals – that house deposit, a rainy day savings pot, an idea when you want to retire and stop working – you only live once!
- When you hit a life changing event ie become a parent, get married or divorced – think carefully and take advice on financial decisions
I truly hope that the recommendations from IWF are listened to and find their way into policymakers’ thinking but that we also raise awareness and change the way we manage money in the UK to create better financial outcomes for everyone!
Find out more www.InsuringWomensFutures.co.uk