Women must rethink their pensions
Many women end up relying on their husbands or partners to fund their retirements. But this can turn out to be a costly mistake. Women are more likely to spend their old age in poverty than men. Ruth Jackson explains what to do to secure a comfortable retirement.
If you're a woman, you are more likely to spend your old age in poverty than if you're a man. The reasons are obvious: women in general work for fewer hours over a lifetime and do so for lower wages. That's bad news, given that high female life expectancy means we need a bigger, not smaller, pot to fund our retirement. It also means many women end up relying on their husbands or partners to fund their retirements. This can work very well indeed, but it can also turn out to be a costly mistake.
Divorced women often end up with no pension rights at all and, depressingly, so do widows. Why? Single annuities. On retirement, most people are obliged to buy an annuity (swapping a lump sum for a stream of income during their lifetime). They get a choice of exactly what sort to buy and can, for example, choose either a joint or a single policy. The joint allows their spouse to continue to receive an income after their death. The single does not. Yet half of all married men buy single life annuities. So for the sake of a slightly higher income during their own lifetimes, they leave their wives in the lurch on their deaths.
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