How can women juggle family and career?
- Alice Harmer, Personal Wealth Adviser
- 15 August 2024
- 5 mins reading time
Balancing work and family is sometimes tough, especially when it comes to finances. As a working mum, career breaks due to childcare, alongside other factors, result in an average ten-year career gap for women, amounting to £39,000 in lost pension savings (1). That’s a big deal when planning your financial future.
At SPW we understand every family’s situation is unique. That’s why our approach to giving financial advice starts with looking at your past and present finances and when you hope to retire.
But it’s not just about numbers: it’s about the kind of life you dream of when you retire, because that could have a huge impact on how much you will need to have saved. For working mums, it is also important to discuss how you can organise your savings to help ensure your children can have the lifestyle they want.
Thinking about your pension
For women who have taken a career break to have children, one of the first and most important things to check is that, if you return to work, you rejoin your work’s pension scheme.
If you have a current or a previous workplace scheme and are starting again, it’s important to establish whether your contributions are being matched by your employer. Getting the maximum you can from your employer is crucial to ensuring that your future financial situation is the best it can be.
Women are also more likely to have missed national insurance contributions due to career breaks, which may mean they are not on track to receive the full state pension. Even so, the government may make these national insurance contributions on your behalf if you spent time bringing up children. While career breaks are not limited to women, they are far more likely to be affected by them than men. Did you know that:
38 percent of women have taken a career break, compared to just 22 percent of men
60 percent of women don’t have enough extra cash to save for their future, compared to 50 percent of men.
Many married women (52 percent) are also unaware of their rights to their partner’s pension in the case of a divorce (2).
The above statistics are stark and we believe more needs to be done to support women in understanding their options and rights when it comes to saving for their future.
Planning for your children’s future
For many working mums, their own financial future can take a backseat to ensuring they are doing what they can to improve their children’s financial prospects. Our advice process will take this into account, alongside any other financial goals you have, aiming to help enhance your financial future.
As a parent or guardian, one of the first things to assess is whether you have any critical illness cover and life insurance to support your family if the worst should happen. We understand that it’s not an easy situation to think about, but when you have financial dependants it becomes even more important to have these difficult conversations.
This underpins any other advice we give, because any other plans you make become irrelevant if something goes wrong and you don’t have protection.
When looking at saving for your children’s future, we offer Junior Individual Savings Accounts (JISAs), a tax-efficient savings or investment vehicle for people under the age of 18 with an annual allowance of £9,000. This will turn into an ISA when your child turns 18.
How can SPW help?
At SPW, we understand the hurdles working mums face. Our advisers are people like you and are here to ease the stress and boost your confidence in your financial plans. From pensions to savings, we’ll make sure everything’s aligned with your lifestyle and goals.
So, what’s the bottom line? It’s all about being prepared and informed. The right advice and planning can help safeguard your financial future and that of your children. We can support you in making sure you’re on track for the retirement you want and the legacy you wish to leave for your kids.
Sources:
(1) Now: Pensions (www.nowpensions.com), ‘Gender pensions gap’, 23 July 2024.
(2) Schroders Personal Wealth (www.spw.com), ‘Women and Wealth Report’, September 2023.
Important information
This article is for information purposes only. It is not intended as advice.
Fees and charges apply at SPW.
The value of investments and the income from them can fall as well as rise and is not guaranteed, and you might not get back your initial investment.
Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.
The retirement benefits you receive from your pension plan depend on a number of factors including the value of your plan when you decide to take your benefits which isn’t guaranteed and can go down as well as up. The benefits of your plan could fall below the amount(s) paid in.
Protection policies have no cash-in value at any time. If you don’t pay your premiums on time your cover will stop, your benefits will end, and you’ll get nothing back. If the benefit amount has not been paid out by the end of the selected term, the policy will end and you’ll get nothing back.
In preparing this article we have used third party sources which we believe to be true and accurate as at the date of writing but can give no assurances or warranty regarding the accuracy, currency or applicability of any of the contents in relation to specific situations and particular circumstances.
Any views expressed are our in-house views as at the time of publishing. This content may not be used, copied, quoted, circulated or otherwise disclosed (in whole or in part) without prior written consent.
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