Challenges facing women in retirement part 3: Improving your pension

This is the third and final part of our series focusing on the gender divide in pensions. If you haven't read them already, parts one and two explain the situation and the challenges, and this instalment focuses on available options.

As has been detailed in the preceding parts of this series, women face a large disadvantage with pensions - many rely on their husbands for retirement money so are uncertain of a lot of the information on the topic, while the fact that women are more likely to work part-time or low-paid jobs means they will have smaller pensions than men, if they have a pension at all. Auto-enrolment will help a great number of women, but as the automatic opt-in only covers people in full-time employment earning over £10,000 a year, it will not cover the many women in part-time work unless they specifically ask to opt-in. Although the evidence is women have traditionally been in worse situations than men regarding pensions, the good news is that there are signs things are improving: the TPAS Women and Pensions 2014 report found that its respondents "have good knowledge of automatic enrolment, which indicates that the awareness campaign by the DWP has been successful" and that "the near universal response was to encourage women to stay in and contribute as much as they could for as long as they could."

All of this suggests that the future will be better than the present, but there is still much ground to be covered. For those that are concerned they are losing out, there are steps that can be taken to improve a pension. The TPAS report explains that "since 1995, any women who were denied access to a workplace pension scheme [such as for being part-time] are able to lodge a claim with an Employment Tribunal for backdated pension rights." The claim must be made either before leaving the job or within six months of leaving. However, "many women do not realise this and they lose out because they do not lodge a claim within the required timeframe."

Women who haven't paid into National Insurance for long enough to have sufficient credits for a State Pension are able to claim up to 60% of their husband's pensions - and if they are widowed, that entitlement can increase to the full 100%. For women who have had career breaks it's important to look into any shortfalls in the National Insurance record; if any exist, it is important to find out if the shortfall can be made up to increase the State Pension provision and provide a greater retirement income.

For women nearer the beginning of their career it's worth investing some time to consider future options. For instance, career breaks, low-paid and part-time jobs can mean small pension pots, and multiple ones; these are harder to manage when they get invested later, resulting in poor value for money. Although retirement seems like a long way off at this point in a career, some forward planning can help ensure a growing pension is in place and easily tracked. If that isn't possible, staying aware of the pots will make it easier to manage and possibly merge them at a later date.

Although with pensions it's true that it's best to start saving early, it's important not to become despondent if you are nearing retirement and have a small fund - everything you save will help your overall pot.

If you are confused about your pension or have decided to make some changes, it's important to seek impartial advice to ensure you make the right decision. Armed with the knowledge to take control of your pension, being a woman needn't have any detrimental effect on your retirement.

Call 0800 304 7288 for a friendly chat about your pension

The details provided in this article are for general information only and are in no way deemed to be financial advice. All of the material is correct as of the publication date, but could be out-of-date by the time you read the article. For our latest information and news, please see our articles section:\

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