Financial Plans for Retirement: Women's Perspectives

Personal Finance and Retirement

New research published today by the Department for Work and Pensions explores how women plan financially for retirement and how their decisions are influenced by their partners. The findings will contribute to Government policies to encourage pension provision for women.

The report presents findings from in-depth interviews with a range of women of different ages, and, where applicable, their male partners. The research was conducted on behalf of DWP by Wendy Sykes at Independent Social Research, in conjunction with Alan Hedges.

The main findings are:

* There are many barriers to building up pension provision and pensions knowledge - some apply particularly to women, whilst others are common to both men and women. Typically, labour market explanations have been used to explain the `pension gap' between men and women. This research paints a more complex picture of the layered and interrelated factors affecting women. These include current family priorities overriding concerns about their personal financial future, concerns about tying up resources, the household-based view of retirement income (partner will provide as it is his responsibility), as well as fragmented, part-time, low paid employment.

Women rarely have a clear picture of retirement - it is a remote concept, often associated with the partner's retirement. Women are not sure what income they would need in retirement, nor how to finance it.

Pensions are not high among women's priorities. This research showed that women were more concerned with their family's short-medium term needs than with saving for their own future, and felt that their partner should/would provide for their retirement. Women rarely think of pensions when making child-related employment choices, and few would have made different life choices if they had considered their future financial position. For many women pensions are perceived to be associated with paid employment, and therefore not applicable to them.

* Many couples pool their finances to a degree and this sharing is valued. The research showed that independent pension provision for women was not seen as salient (either by women or their partners). Whilst people know that partnerships often terminate, they don't like to think about it or plan for that eventuality. Many women did not know how their pension situation (State or private) would be affected by divorce, separation or bereavement.

* The research showed some evidence of a cultural shift over time. Younger women seem more likely to value a degree of financial independence. They recognise that many partnerships do not endure, and are more likely to feel it is important for women to make pension provision in their own right. However, traditional elements of gender roles and financial dependency still persist in the lives of many younger women (particularly those who are married or have children), and the effects of changing values and expectations are often diluted by other factors. his tends to perpetuate the pension gap.

* The research highlights that women have low levels of knowledge and understanding of financial planning for retirement. Women have less interest and awareness in pensions and saving for retirement than men (whose knowledge levels are also low). The research showed widespread uncertainty about the eligibility criteria for, and the value of, the State Pension. There was little knowledge or understanding of Home Responsibilities Protection. In general, women felt that help and advice are neither readily available nor accessible.

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1. The research was carried out on behalf of DWP by Wendy Sykes at Independent Social Research, in conjunction with Alan Hedges. Qualitative, in-depth interviews were conducted with 69 women and 27 of their male partners. Interviews were carried out in 5 areas of the country between September and November 2004.

2. Research Report 247 - 'Financial plans for retirement: women's perspectives' is published on 27th June by Corporate Document Services. A free summary is available from Paul Noakes, 4th Floor, The Adelphi 1-11 John Adam Street, London WC2N 6HT. The report and summary are available free on the DWP website.

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