As retirement approaches, it's worth taking time to consider your long-term financial plans and the various tools that might help you achieve your goals. This was the case for 67-year-old Sarah*, who began exploring her retirement options, including how her home equity might fit into her financial planning, but had never before spoken to a financial adviser.
Sarah isn't alone. Royal London’s Tackling the Gender Pension and Wealth Gap report found not only that women are less likely than men to have taken professional advice but also that they, on average, contribute less to their pensions than men. When traditional retirement planning hasn’t worked, there are still options available to help women retire comfortably.
You're not the only one feeling this way
Recent research reveals that there are other women who share Sarah's experience. Nearly one in three women don't have a pension at all, compared to one in five men. For those who do have pensions, they may find that their pot is around £65,000 smaller on average than that of their male counterparts. Yet, perhaps most telling of all, research from Schroder’s Personal Wealth discovered that only 11% of women feel "very confident" about their retirement savings and planning, compared to 25% of men. Although not every woman will encounter these circumstances, it's vital to acknowledge the financial impacts for those who do.
These statistics aim to reassure rather than discourage. If you're thinking, "That sounds like me," remember that you’re not alone. The reasons many women face financial challenges are complex, ranging from taking career breaks for childcare to the gender pay gap or caring for relatives.
The advice gap isn't your fault
Royal London’s Tackling the Gender Pension and Wealth Gap report found that, on average, women feel less confident than men when it comes to seeking financial advice, resulting in a gender advice gap of 7%. Perhaps their partner managed the finances, they prioritised present needs over planning for the future, or they were simply not confident in this area. This can make the idea of speaking to a financial adviser feel daunting.
This was the case for Sarah, too. She kept postponing her financial appointments because she thought she'd be judged for not having everything sorted sooner.
This hesitation is understandable, but talking to a professional can be beneficial. Financial advisers (particularly those specialising in later-life lending solutions) are accustomed to working with people who are exploring their options for the first time. They understand that everyone's journey is unique, and therefore, the solutions may be too.
Finding the right financial support for you
Equity release is a later-life lending solution available exclusively to homeowners over 55. It is one solution that may allow you to access wealth locked in the value of your property, commonly in the form of a Lifetime Mortgage.
Equity release was a solution for Julia**. Julia had been reliant on her partner’s retirement income, but after his sudden passing, she struggled to fund the renovations to her home that were already in progress.
Julia decided to speak with an adviser, who told her she could consider equity release as a potential solution. She had never thought about equity release before, but after an equity release adviser clarified how it would apply to her situation, she decided to proceed with an application. She was able to access £60,000 in a lump sum for renovations, with a further drawdown of £90,000 available for future care needs.
It is important to note that equity release will reduce the value of your estate and may affect your entitlement to means-tested benefits. To understand the features and risks, ask for a personalised illustration.
A solution that works for you
Women may want to prioritise staying in their family home, the place where they raised and cared for family members and where they made treasured memories. The idea of selling up and moving can feel like losing more than just bricks and mortar. Equity release could help with retirement funds and allow women to retain full ownership of their homes.
Equity release products can also offer additional flexible features to suit different situations. For example, drawdown options allow you to take an initial lump sum and then access funds from a separate facility when required at a later date, rather than releasing everything upfront. Plans from lenders who are members of the Equity Release Council also allow you to make voluntary repayments, subject to lending criteria, and come with a no-negative-equity guarantee, meaning you will never owe more than the value of your home.
Starting the conversation
If you’re curious to learn more and think equity release could help in your situation, the first step is to have a conversation with an expert equity release adviser. They're not there to judge your financial history or push you into a decision, they’re there to help you understand your options.
Breaking the silence around women's financial concerns isn't just about speaking up; it's about recognising that you’re not alone. By talking through your situation with an adviser, you can ask questions specific to your circumstances and gain a better understanding of how you can take control of your finances.
*Sarah’s story is an illustrative example, fictional and not based on a real story.
**This is a fictional scenario based on a real customer experience, created for illustrative purposes only.
