09 March 2016

Women care far more about their financial future than men. But even with the best will in the world, women still have a substantial Achilles heel when it comes to saving for retirement.

BlackRock’s latest Global Investor Pulse Survey, the largest study of investor behaviour in the world, found that almost half of women highlighted saving money as a financial priority. This compares with 42% of men.

This trend was particularly evident amongst independent millennial women aged 25 to 34, who prioritise getting a foot on the property ladder far more than men of the same age. Nearly four in 10 millennial women already have a mortgage, compared with only 31% of millennial men.

Women of all ages are far more wary about the impact of financial risks, such as the high cost of living alongside inflation. Meanwhile, men are more likely to turn to quick-fix debt: only 4% of millennial women have a payday loan, compared with one in 10 men.

Crisis of confidence

Awareness does not necessarily translate into confidence, however. More than half of men are comfortable making their own investment decisions, compared with just 38% of women.

Around 49% of men feel in control of their financial future, versus 39% of women. This lack of confidence helps to explain why women are more likely to have a higher portion of their savings in cash than men, at 73% versus 60% (both admittedly high levels, and higher than the 40% level both genders say is ideal).

This difference of opinion is evident in attitudes towards retirement income. Women anticipate needing less household income for retirement than men. This discrepancy was highest amongst women aged 35 to 44, who said a total annual income of £23,000 per year would suffice – £4,000 less than men.

One common aspect across both genders is a misunderstanding of how much they need to grow their pension pots to meet retirement income expectations. Not including the state pension, men underestimated by £268,000, while women were off by £275,000*.

The good news is that the majority of men and women have started saving for retirement (64% and 56% respectively). But the males surveyed are far more confident they will reach their expectations.

So how can female saver confidence improve? Making use of every tax advantage available, via a workplace or personal pension scheme and ISA is a vital first step.

The women we surveyed contribute 6% on average to their defined contribution pensions. Ideally, this contribution level should be closer to 15-20% to increase the likelihood of achieving the retirement you want.

While this number may sound high, it is important to remember that your employer and the government are helping, too. The more you save into your pension, the more the government contributes. Some employers also match employee contributions.

Saving regularly for retirement (and putting significant cash piles to work) could not only help women feel more confident about their financial futures, it might also mean they reach their goals sooner.

*Source: Hargreaves Lansdown. Based on current annuity rates for a 65-year-old today: level rate

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This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or financial product or to adopt any investment strategy. The opinions expressed are as of 04/03/2016 and may change as subsequent conditions vary.

BlackRock Investor Pulse was conducted in association with Cicero Group between July and September 2015. A nationally representative sample of over 31,000 people in 20 countries was surveyed. They were aged between 25 and 74 years old, and 4,000 were UK residents. The results of this survey are provided for information purposes only. The conclusions are intended to provide an indication of the current attitude of a sample of citizens in the UK to saving and investing and should not be relied upon for any other purposes.

‘More than half of men are comfortable making their own investment decisions, compared with just 38% of women’