“Being financially literate is a powerful thing, especially for women” - Otegha Uwagba, Founder of Women Who.

I can see why, at first glance, this might sound like a really patronising discussion topic – after all, why should us women need ‘special’ financial advice?! Well, while there is a great deal of overlap between financial advice for men and women, there are particular sets of circumstances which only apply to women, and it’s never been more important for us to factor these into their financial planning.

Why do women need specific advice on financial planning?

Many of the pension products and services in the marketplace were designed by men, for men. Fortunately the times, they have a-changed. Yes, life events can apply to both men and women, but some will only happen to women, such as pregnancy and menopause.

Also, it’s statistically proven that women tend to give up work or reduce their hours to look after children and elderly or infirm family members, and even grandchildren. In fact, recent ONS data shows that the number of women aged 25 – 34 years old who are leaving the workforce to look after family has increased by 12.6% in the last year.

Women are entitled to 12 years of National Insurance credit per child, as well as carers’ National Insurance credit for those giving up work to look after grandchildren.

Nonetheless this is storing up a huge issue for the future – gaps in paying both National Insurance and state pension contributions will result in depleted pension pots for a large proportion of our population.

Mind the gender pay gap

The gender pay gap is calculated as the difference between average hourly earnings of men and women, as a proportion of men’s average hourly earnings. First of all, it’s important to note that the gender pay gap has been declining slowly over time, falling approximately a quarter over the last decade. (www.ons.gov.uk)

Unfortunately in 2021 the gap was still 7.9% among full-time employees. Statistics show that women often work in lower-paid jobs, meaning that all too often they may not be enrolled for pensions.

Menopause matters

In her recent Channel 4 documentary, ‘Sex, Myths and the Menopause’, Davina McCall revealed that menopausal women are the fastest growing group of workers, with 4.3million women in this category. A survey carried out for the programme revealed that 9 out of 10 women felt that menopause had had a negative impact on their working life.

The survey also highlighted that 10% of women leave work during menopause, and 14% go part-time. Yet, only 10% of employers are in that space where they are actively raising awareness and making simple changes to help keep these women in the workforce.

So we have another factor impacting women only, which will reduce their private pension as well as their state pension. Having a smaller pension when they retire is compounded by the fact that women live on average 5.6 years longer than men. (www.ec.europa.eu).

Conversely, women are more likely than men to be diagnosed with a critical illness before the age of 65 (1 in 4, as opposed to 1 in 5), so it’s really important that they consider critical illness cover in the event that can’t pay their bills due to ill health.


The emotional upheaval of divorce is frequently exacerbated by financial issues and the tensions over dividing up assets. While retirement plans and pensions are often key assets in any divorce decree, it’s frequently women – having paid less into a pension fund due to caring responsibilities or ill health – who fare worst.

The best advice I can give to anyone in this situation is to seek financial advice. Currently, just 3% of people getting divorced get financial advice. While solicitors will look at the present, financial advisers look to the future and will help you to plan for a more comfortable retirement. Have a listen to Phil’s podcast episode 54, which offers some advice on pension planning during a divorce.

What advice can you give to women on how to prepare for their financial future?

If you take anything away from this article it’s this: the earlier you start planning for the future, the better. The decisions you make earlier on in your life will determine your quality of life later on.

The Retirement Living Standards website (Home - PLSA - Retirement Living Standards) is a good place to start. Based on independent research by Loughborough University, the standards have been developed to help us to picture what kind of lifestyle we could have in retirement. For example, if you start saving for a moderate retirement pension of £20,800 p.a. at age 22 you’ll need to save £340 per month, as opposed to £660 per month if you start in your 40s.

Think on a family basis. If you’re in a couple, think as a couple when you’re dealing with money. Talk to each other about your finances. Consider the impact that having children will have on your financial expenses and also your career, and plan accordingly.

Plan from a tax-efficiency point of view. Claim everything that you’re entitled to, including tax-free childcare.

We need to think about risk as well as pensions. If you’re a stay-at-home parent, consider paying £3600 (the maximum) into a private pension scheme. Income protection is also available for stay-at-home parents, in the event you’re no longer able to care for dependents.

If you’re over the age of 45, check your pension status (Check your State Pension forecast - GOV.UK (www.gov.uk)). You need 35 years of National Insurance contributions to claim the full state pension. If you spot any gaps you can pay additional contributions to top up your pension.

Whether you’re male or female, you can’t plan for everything in life, but you can plan how to make the most of your finances so that when stormy seas do hit, we can chart a path through them.

Emma Reid is a Financial Adviser at Phil Anderson Financial Services. Launched by Phil Anderson in 2010, Phil Anderson Financial Services offers independent financial advice on a range of areas including investments, pensions, savings, mortgages and insurance, all individually tailored to clients' needs and circumstances. 

Based in Ellon, Aberdeenshire, the firm also has bases in Aberdeen and Caithness.  For further information visit: https://www.philandersonfinancial.co.uk/home/