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Gender pensions gap: impact of divorce or bereavement on financial resilience – Wilson

by: Stuart Wilson, corporate marketing director, more2life
  • 22/10/2021
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Gender pensions gap: impact of divorce or bereavement on financial resilience – Wilson
The shocking increase to the gender pensions gap, which reached a record £183,936 in 2021, has raised eyebrows for advisers across the UK.


But recent more2life research has highlighted a group that is at greater risk of turbulent economics and rising bills in later life; widows and divorcees.

Socio-economic changes are the only long-term solution to addressing this disparity, but advisers can play a vital role in raising awareness of the importance of holistic financial planning by adjusting conversations with clients in light of these findings.

The numbers are clear. Our research showed that not only do just a third of UK women (35 per cent) report they have independent pension wealth (whilst 40 per cent do not have any pension wealth whatsoever), 59 per cent of widows surveyed felt that they had lost out on retirement income following the death of their partner. This equals 1.5 million widows across the UK and stands in stark contrast to just 16 per cent of widowers who said the same.

For divorcees, a similar picture emerges: 39 per cent of women felt that they had lost out on the retirement income they receive or expect to receive as a result of splitting from their partner, compared to only 21 per cent of men. In a period of rising inflation and uncertainty around energy bills, if consumers are unprepared for the loss of income following a divorce or bereavement, they may struggle to manage household finances or afford monthly mortgage repayments.


What can advisers do to help bridge this gap?

As professionals on the front line of financial services, advisers are uniquely placed to help women, and men, plan for later life and understand the solutions available to them. Firstly, simply raising awareness that the gender pensions gap both exists, and is heightened for divorcees and widows, may help these groups better plan mortgage repayments and household bills in later life.

As part of a more holistic financial conversation, advisers should also consider and highlight the role that property wealth can play in helping to bridge any income gap. More women (27 per cent) than men (21 per cent) own property wealth, despite the gender pensions gap, showing how tapping into this property wealth may be key.

Equity release is one option and can even be used to complete mortgage repayments, consolidating the debt but securing a client’s forever home so they are more secure against rising bills.

In the unfortunate event of a bereavement or divorce, the last thing a client needs is to unwittingly fall through the cracks into this gender gap facing a future struggle to pay bills or meet mortgage payments. Advisers may be the first line of defence and need to consider all arrows in their client’s quiver to make up this shortfall.


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