Assessing your retirement preparation strategies: Do you handle your pension planning independently or rely on your partner? Engage in our questionnaire.
In the UK, pension planning habits vary significantly based on income level and gender, according to recent research. Higher income individuals are more likely to engage in active pension planning, with 80% of those earning over £125,000 identifying as active planners, compared to 33% of those earning £35,000 or less. This suggests that affordability and engagement play a crucial role in shaping pension planning behaviour by income [2].
When it comes to gender, women often exhibit more risk-averse investing behaviour, yet their investment returns outperform men’s by 1.8%. This indicates a more strategic and values-led approach to pension planning, despite traditionally smaller pension pots and longer life expectancy. Women also face unique life circumstances such as longer lifespans and care responsibilities that shape their pension and investment goals differently compared to men [4].
Household pension planning dynamics often show one partner managing the pension planning role, with about 20% of couples reporting their partner as the planner. However, 13% of couples say both procrastinate, indicating gendered and shared roles in pension decision-making [2].
In summary, higher income correlates strongly with more active pension planning, while gender differences reveal women take a more cautious but effective investment approach, shaped by longer life expectancy and earnings disparities. Couples often divide pension planning roles unevenly, which also influences individual habits [2][4].
It's essential to note that the standard pension planning does not include income tax, housing costs, and potential care costs in later life. Nearly half of adults (44%) consider themselves as 'pension planners', while men are more likely to identify as such (54%) compared to women (35%) [2].
For those who have lost track of old pensions, the Government's free pension tracing service is available. Savers often collect a number of pension pots during their working lives as they move jobs, but many never bother combining them [2].
If you're unsure about your pension planning and where to start, you're not alone. 22% of people admit to being unsure [2]. To help determine retirement affordability and needed savings, consider using pension calculators like the one offered by This Money.
Remember, merging pensions can save on paperwork and costs, but it's not always advisable because you can risk losing valuable benefits attached to employer schemes. If you need assistance in building your pension, there are various companies offering Self-Invested Personal Pensions (SIPPS), including AJ Bell, Hargreaves Lansdown, Interactive Investor, InvestEngine, Prosper [4].
Lastly, when thinking about your pension planning, consider what proportion of your current income you want to aim for in retirement. Confidence in pension planning increases with income, reaching 80% among the top earners [2]. To get a state pension forecast, visit the appropriate government website. Be cautious when doing an online search for the Pension Tracing Service, as many companies using similar names may appear in the results, some of which may be fraudulent.
- To improve pension planning and maximize savings, one might find it beneficial to explore Self-Invested Personal Pensions (SIPPs), offered by companies like AJ Bell, Hargreaves Lansdown, Interactive Investor, InvestEngine, and Prosper.
- In the realm of personal-finance and education-and-self-development, utilizing pension calculators such as the one offered by This Money can aid in determining retirement affordability and needed savings.
- While women's pension pots may be traditionally smaller and they may have longer life expectancies, their investment returns tend to outperform men’s by 1.8%, suggesting a more strategic and values-led approach to pension planning, which underscores the importance of finances in personal-finance and education-and-self-development.
