Menopause
Important information - the value of investments can go down as well as up, so you may get back less than you invest. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not normally be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity's advisers or an authorised financial adviser of your choice.
Know what you're up against
According to the report ‘Bridging the Gender Pension Gap’ from mutual life and pensions company, Royal London, women are 'more likely than men to reduce their hours - or exit work altogether - in their 50s, which is the prime age bracket for pension saving'1.
To understand the impact this could have on a woman’s pension pot, Royal London calculated the potential impact the menopause could have on a 50-year-old woman in full-time work with a salary of £40,000 and a pension fund of £100,000. 'If she works full time until State Pension age, she could be around £126,000 better off compared to another woman who stops working at age 50, who instead of having a pension pot of £355,510 would have a pension pot of £229,202'1.
'So, if a woman had to reduce their hours by 50% at age 50 due to their menopause symptoms, this would reduce their pension pot by £63,000, so they’d have £292,356 at State Pension age. This was calculated using wage increases of 2.5% each year, a growth rate of 5% (not including charges) and total pension contributions of 10%, split between the employee and her employer'². This kind of reduction in retirement savings could have a very real impact on how comfortably a woman could retire.
It goes to show that being able to save during this stage of life is critical to achieving healthier savings - as it’s also a time when many women are at the peak of their careers.
Source:
1.
Bridging the Gender Pensions Gap - Royal London - May 2022
2.
Could the menopause affect your retirement? - Royal London - 6 June 2024
Take control
There are no givens when it comes to the menopause. You may be completely unaffected. Or you may not be. But at least if you prepare financially for the worst, that's one thing you won't have to worry about.
- Start by putting away an extra 1% into your pension. It really can make a big difference over time.
- Make sure you max out on any company pension contributions that are on offer - after a while you probably won’t even notice the money coming out as it’s taken at source.
- Put pay rises or bonuses to work. Even if you can’t put all of it away for your future adding a little of that extra income to your pension will help in the long run. Or pop it in a Stocks and Shares ISA, which you can access anytime.
- Think about combining your pensions if you’ve collected a few in your working career. Bringing them together could make them easier to manage and it could work out cheaper for you, if our service fees are less than you’re currently paying. Learn more about transferring your pension here.
Important information - it’s important to understand that pension transfers are a complex area and may not be suitable for everyone. Before going ahead with a pension transfer, we strongly recommend that you undertake a full comparison of the benefits, charges and features offered. To find out what else you should consider before transferring, please read our transfer factsheet. If you are in any doubt whether or not a pension transfer is suitable for your circumstances we strongly recommend that you seek advice from one of Fidelity’s advisers or an authorised financial adviser of your choice.
What you could do next
Make the most of your pension allowances
Find out how to make the most of the tax-efficient pension allowances with our handy guides.
Start looking after future you, today
Take control of your retirement savings and get your money working harder with the Fidelity SIPP.
Explore the pros and cons of pension transfers
Find out how bringing pensions together can make it easier to manage your retirement savings, and how to find out if this would be suitable for you.
