3 ways women can reinvigorate their finances following the pandemic

The last year’s had a profound effect on the economy, people’s finances and our lives altogether – that’s been especially true for women.

Since the first lockdown it’s been found that women were more likely to be furloughed and more likely to pick up unpaid childcare.

It’s also meant that around four out of ten UK women have had to access their savings just to cover their regular expenditures.

And the effects? Are expected to be long term.

We know that home-schooling has meant some women have had to face reduced working hours and, as lots of women are self-employed or work part time, have been more vulnerable to income loss. And, it’s not news that women have faced an unfair job economy when it comes to gender pay gaps.

But there are some things that we can do to try and mitigate the huge impact the pandemic has had, and help decrease those effects over time.

This article isn’t personal advice. Pension and tax rules can change, and benefits depend on your circumstances. If you're not sure what's right for your situation, please ask for financial advice.

1. Think long term

Planning ahead can seem anxiety-inducing in itself. But there are some key financial steps that you can take to make sure you’re on your best game when it comes to investing.

It starts with the P word – Pensions.

GUIDE TO PENSIONS FOR WOMEN

It’s sometimes easy to bury our heads in the sand when it comes to pensions, so much so that a quarter of women have never calculated how much they’ll need in retirement. And as many as 27% say they don’t know how much they contribute.

But there are things we can do to take control of our pensions.

Step 1:

If you’ve been furloughed over the last year, your employer should still be paying into your pension. Although it does mean you’ll find yourself with a little less in there than you expected.

When you return to work, try injecting a bit more love into your longest-term investment if you can. You can use our pension calculator to help you decide how much to put in.

Remember money in a pension can’t normally be taken out until age 55 (57 from 2028).

Step 2:

Been made redundant this year, taken a career break, or had time off to take care of older relatives, children or even grandchildren? You can top up your National Insurance contributions when you return to work, or buy voluntary contributions with your savings.

It’ll mean you’ll be able to build up more qualifying years, which in turn results in higher state pension payments. You must claim for the gap in National Insurance payments within 6 years. The deadline is on 5 April every year, in line with the end of the tax year.

You could think about paying some of your cash savings into a personal pension, like a Self-Invested Personal Pension (SIPP). A SIPP is a type of pension that lets you invest how and where you like. You decide how much to pay in and when, and you can pick investments to match your financial goals and attitude to risk.

You need to be comfortable making your own investment decisions and accept the risk of investing though. Unlike cash, all investments fall as well as rise in value so you could get back less than you invest.

Did you know that anyone can pay into your personal pension? If your partner or spouse is still working and can afford to pay some money into a pension for you, this could help when it comes to your longer-term finances.

If you’re a UK resident under the age of 75, you’ll also receive a government top-up of 20% in the form of tax relief on contributions. If you are a non-earner you can contribute up to £2,880, which after tax relief will increase to £3,600.

Find out more about SIPPs

2. Keep (or start) investing

We know that the pandemic has cost many women their jobs, their time and their savings, but there are ways to help claw back some of the damage.

Our spending habits have changed over the course of the pandemic. Commuting and coffee has been replaced by higher grocery bills. But for some it’s been an opportunity to supercharge their investing.

Did you know that if you’re a member of a workplace pension, you’re probably already investing in the stock market?

What’s more is that women are starting to approach investing in a different way. Typically, we see women save money in Cash ISAs or in a cash savings account. But there’s been a sizeable shift meaning that more women are now investing in stocks and shares.

It doesn’t mean you have to be putting big bucks away. If you’re comfortable with the risks of investing, you can start with HL from as little as £25 a month and start to reap the benefits of compounding over a number of years. Investing your money for the long term should help you weather the storms of the market ups and downs, but of course there are no guarantees.

Get started with investing

3. Get a helping hand

It’s never too early, or too late, to get help when it comes to your finances. Especially after the impacts of the pandemic.

Women are expected to hold the majority of the UK’s wealth by 2025. However, some women have fallen out of love with their finances and it’s due to a couple of misconceptions.

1. Wealth

The first is that you must be sitting on large piles of cash to even be spoken to by a financial adviser.

But this simply isn’t true.

Financial advice isn’t just for the incredibly wealthy and you don’t have to have hundreds of thousands to be able to get advice. It’s for everyone.

2. Age

The second is that there is an age limit. Or, that you’re only likely to need advice the older you get, and only if you’ve been through a significant life event.

But this also isn’t true. There’s no age limit.

Someone in their 30’s is just as likely to benefit from advice as someone in their 50’s or 60’s for example. Although women have different goals at different stages of their lives, it doesn’t mean that one goal is more or less important than the other.

If you’ve been negatively impacted by the pandemic and you’re not sure what to do next, you could always consider speaking to our advisory helpdesk. There’s no obligation or charge if you speak to them.

They won’t give you any personal advice, but they can answer any questions you have about our advisory services. They’ll talk to you about the cost of advice and help you decide whether advice is right for you.

If you feel like you’d still like to talk to an adviser, your details will be passed on to one of our experts.

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