08 March 2020

We need to address myths stopping women preparing for retirement

7 min read

Helen Morrissey, Personal Finance Specialist
Helen Morrissey

Corporate PR Specialist – Long Term Savings


Addressing myths around pensions and investments is vital to help women prepare better for retirement according to Royal London. Part time work and taking time out to look after children already mean women face significant challenges in preparing for retirement but there are also several myths that can have a further impact.

  1. Myth 1: I am a saver not an investor
    We often talk about saving for retirement and this can lead to misunderstanding about what happens to your pension contributions. They aren’t held in cash like a bank but are invested in the stock market where they have the capacity to grow significantly over time and really boost your retirement savings. However, research carried out by the Wisdom Council in partnership with Royal London1 showed only 8% of women with a pension saw themselves as investors.
  2. Myth 2: Investing is only for wealthy people
    Thanks to auto-enrolment there are millions more people contributing to a workplace pension. All of these people are invested in the stock market, the returns from which can make an enormous difference to their financial wellbeing in retirement. Far from being something only enjoyed by the wealthy auto-enrolment has made us all investors. ISAs are also a great way to invest. However, while over 5 million women hold a cash ISA less than 900,000 hold a stocks and shares ISA.
  3. Myth 3: I can rely on my partner’s pension provision
    If you are married or in a long term relationship it can be tempting to think you can rely on your partner’s pension when you retire. While this can work if you stay together, what if you divorce or split up? Pensions are often not mentioned in divorce settlements and cohabiting couples have no automatic claim on a partner’s pension. This means you may face significant financial difficulty in later life if you have not made your own pension provision. 
  4. Myth 4: It’s too late to start contributing now
    Pensions are a long term investment but do not despair if you think you have left it too late. Figures from Royal London show that someone starting pension contributions at the age of 40 will potentially accumulate more than £234,000 in a pension when they retire at 68 if they contribute at the current auto-enrolment minimum of 8%. If they choose to increase their contribution to 14% then they could end up with around £409,000. While 14% seems high it is important to note pension contributions are made up of the individual’s contributions as well as contributions from the employer and the government.
  5. Myth 5: I don’t need financial advice
    You may be put off by the upfront cost in consulting an independent financial adviser but over time the cost does pay off. An adviser will discuss your long term financial goals and help you put a plan in place to help you achieve them. They will assess your investments to make sure they continue to meet your needs and offer advice on whether you need to put more money away. Recent research by the International Longevity Centre supported by Royal London showed that those who took financial advice between 2001 and 2006 were on average £47,700 better off than those who did not2.

Helen Morrissey, pension specialist at Royal London, said:

“While the myths above can apply equally to men, women already face significant financial challenges in preparing for retirement. Employer contributions, tax relief and investment returns can play a huge role in boosting the amount in your pension and have a powerful impact on your financial wellbeing in retirement. If we can raise awareness of these issues we can help women build a more resilient future.”


Notes to editors

How much you can accumulate in a pension if you start contributing at the following ages:

  Contribution %
Age 8% 10% 12% 14%
30 £373,856 £467,320 £560,784 £654,248
35 £301,498 £376,873 £452,247 £527,622
40 £234,257 £292,821 £351,385 £409,949
45 £174,699 £218,373 £262,048 £305,723
50 £123,781 £154,727 £185,672 £216,617

Average Weekly Earnings (AWE) as per latest ONS data (April 2019)
AWE inflation 2.5%
Fund growth of 5% (net of AMC charge)
Monetary amounts in terms of future money
Retirement age 68
Woman is age 30 as of 2019 - future salaries adjusted by AWE inflation


Other partners include Aberdeen Standard Investments, EY, HSBC Global Asset Management UK, Scottish Widows, St James’s Place (SJP) and Vitality.

2What it’s Worth – Revisiting the Value of Financial Advice can be found here: https://www.royallondon.com/siteassets/site-docs/media-centre/policy-papers/ilc-what-its-worth-final.pdf

For further information please contact:

Helen Morrissey, Corporate PR Specialist – Long Term Savings

About Royal London:

Royal London is the largest mutual life insurance, pensions and investment company in the UK, with assets under management of £139 billion, 8.6 million policies in force and 4,348 employees. Figures quoted are as at 30 June 2020.