How expert financial advice can help to close the menopause retirement gap

Last month hosted World Menopause Day, a campaign aimed at breaking the stigma around menopause discussions while highlighting the support available.

Reports suggest that menopause symptoms can cost women up to around £126,000 in lost retirement savings and yet the subject remains largely taboo. Around two-thirds of UK women feel unable to talk to colleagues about it.

Alongside wage disparities and the persistence of an imbalance regarding “traditional” caregiving roles, menopause may play a key part in the continuing gender pension gap.

Financial advice, though, can help to mitigate the effects of menopause on long-term retirement planning.

Here’s how.

Menopause could cost some women more than £126,000 in lost retirement savings

Back in 2022, Royal London reported on the gender retirement gap and found that menopause could cost some women more than £126,000 in lost retirement savings. This loss results from several factors.

While menopause occurs, on average, at age 51, symptoms can begin years, and in some cases decades, earlier.

Menopause might arrive at a crucial time in your career, and the symptoms can be severe.

Around 10% of women surveyed by the Fawcett Society confirmed that they had left work due to menopause symptoms. That amounts to around 333,000 people.

Symptoms have also forced:

• 14% of women to reduce their hours
• 14% to move into part-time work
• 8% to rethink applying for a promotion.

Menopause can arrive at a critical time in your career when your experience and knowledge mean that your salary is rising. You might even be taking home the highest amount you’ll ever earn. This in turn means that your pension contributions will likely be at their highest.

Time off at this stage could see you miss out on further promotions, stalling your rise through the ranks, and mean that your retirement fund suffers. Both issues can have far-reaching consequences and could mean that you’re unable to live your dream lifestyle in retirement.

According to Royal London, reducing hours at this point could cost a woman £63,000 when compared to a male counterpart who remains in full-time work.

The report goes on to suggest that around 1 million are forced to quit work entirely when menopause symptoms become severe. Symptoms of menopause and perimenopause (literally “around menopause”) can include:

• Anxiety
• Brain fog
• Depression
• Memory problems
• Joint pain
• Hot flushes
• Fatigue

Ending a career early due to any of these symptoms could lead to a £126,000 pension shortfall compared to a male who continues working.

World Menopause Day aimed to break the taboo surrounding menopause and its symptoms

Discussing a natural biological process shouldn’t be difficult or taboo, and yet Royal London finds that:

• 65% of surveyed women feel unsupported at work
• 69% haven’t talked about menopause with colleagues
• 97% didn’t disclose their symptoms to their manager.

Removing the stigma around these discussions is key if women are to feel supported in the workplace. But financial advice can help too.

Menopause contributes to the gender retirement gap but professional financial advice can help

The ‘2022 Women & Retirement Report’ from Scottish Widows finds that women’s longer life expectancy and greater likelihood of needing care mean that they need a larger pension fund than men. The report suggests an extra £85,000.

And yet, the average male aged 65-74 has more than £250,000 of pension assets, around £100,000 more than the average woman of the same age.

The greater number of women in part-time work, time off to raise a family or to provide care to elderly relatives, and menopause symptoms all contribute to this gap.

Financial advice can’t tackle the societal issues behind this disparity but it can help to ensure that women are adequately prepared.

That means helping you to start retirement planning early, with a clear understanding of the type of lifestyle you want to live in retirement and how much that will cost. It also means considering future obstacles to pension saving, like raising a family and menopause.

Open and honest conversations are a vital part of any long-term relationship and will be crucial for building a long-term plan too.

Advice can help in various areas of retirement planning including:

• Helping you to make the most of pension tax relief, including claiming any additional amounts due
• Helping to ensure your workplace pension scheme is working for you
• Reminding you to dig out older pensions you might have lost that could be consolidated into a single pot
• Tax-efficient withdrawal planning, while leaving money back as a contingency to pay for later-life care
• Checking in regularly to help ensure you’re on track to live your dream lifestyle from the retirement date you choose.

Life can throw up many obstacles, but a robust plan will be strong enough to adapt, ensuring you always remain on track to achieve your goals.

Get in touch

To learn more about how our financial planners can help you stay on track to your long-term retirement goals, whatever life throws at you, email us at advise-me@fosterdenovo.com or call us on 0330 332 7866.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Pension income could also be affected by interest rates at the time benefits are taken.

Pension savings are at risk of being eroded by inflation.

Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.

Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement.

Foster Denovo Limited is authorised and regulated by the Financial Conduct Authority.

Registered Office: Foster Denovo Limited, Ruxley House, 2 Hamm Moor Lane, Addlestone, Surrey, KT15 2SA.

Sources: https://www.royallondon.com/about-us/media/media-centre/press-releases/press-releases-2022/october/women-going-through-the-menopause-could-face-126k-retirement-shortfall/

https://www.fawcettsociety.org.uk/Handlers/Download.ashx?IDMF=9672cf45-5f13-4b69-8882-1e5e643ac8a6

https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf