4 retirement planning blind spots every woman should be mindful of

Women are set to inherit a significant proportion of the world’s wealth in the near future. However, on average, they have much less saved by the time they retire than men do.

Legal & General (6 April 2025) recently reported that the average UK pension pot for men and women over 50 is £84,205 and £39,654, respectively. That means men typically have more than double the amount of pension savings women do.

Fortunately, there are steps you can take to ensure your retirement fund supports the lifestyle you desire after leaving work.

Keep reading to discover four retirement planning blind spots every woman should avoid and learn how you and your adult daughters can prepare financially for the future.

1. Putting off planning for your retirement

Retirement planning might not feel like a pressing need when you’re young and have many years of work ahead of you.

Indeed, if you’re approaching or in retirement, you might regret not starting to save for the future at an earlier age.

A recent survey by Which? (25 September 2025) found that 1 in 10 retirees regret not planning earlier, and almost half said they wish they’d saved more.

So, whatever stage of life you’re at, now is the time to start planning for your retirement. Moreover, if you have adult daughters, encourage them to invest in their futures as early as possible.

They might be more focused on juggling everyday costs, such as their mortgage and childcare. However, saving and investing regularly from a young age – even small amounts – gives their money more time to benefit from compounding interest. This means earning interest on interest, which creates a snowball effect that could grow their retirement wealth significantly over time.

Additionally, paying into a pension as early as possible could maximise the benefits you or your daughter gain from tax relief on eligible contributions.

2. Underestimating your life expectancy

Your life expectancy is a key consideration in retirement planning as it will affect how long your retirement funds need to last.

Unfortunately, research published by PensionsAge (9 June 2025) has found that on average, women underestimate their lifespan by seven years. This could increase the risk of:

• Being unable to cover unexpected costs, such as healthcare expenses
• Having insufficient funds to leave a meaningful legacy to loved ones
• Experiencing a lower standard of living as you get older
• Running out of money later in life.

Of course, no one can predict exactly how long they’ll live, but you could make an educated estimate based on your:

• Personal health
• Lifestyle factors
• Family history
• National averages.

The Office for National Statistics’ (ONS; 14 February 2025) life expectancy calculator provides useful benchmarks that could help you start planning.

3. Pausing pension contributions during career breaks

According to a LinkedIn Economic Graph (6 November 2024) review of global professional profiles, on average, 28.8% more women than men report a career break.

While there may be many reasons why a woman might choose to step back from professional life, caring responsibilities are often top of the list. The LinkedIn study found that globally, 33.6% of women took a career break to be a full-time parent, compared to just 7.3% of men.

Pausing pension contributions during these gaps in employment could have a detrimental effect on a woman’s long-term financial security.

If you stop paying into your pension, you’ll miss out on potential:

• Employer contributions
• Compound growth
• Tax relief.

As such, even brief gaps in your pension contributions could make it harder for you to accumulate the wealth you need for your desired retirement.

Instead, if you plan to return to your current employer after a career break, ask them whether you can keep contributing to your pension.

Some pension schemes allow members to continue making payments even after they’ve handed in their notice – you’ll need to arrange this as it won’t happen automatically.

Alternatively, set up a new pension to keep your retirement plans on track while you’re away from work.

Remember, if you have a partner who is earning, they could make contributions to your pension during your career break. Even if you have no income, you can pay up to £2,800 a year to a pension (2025/26), equivalent to £3,600 including basic tax relief of 25%.

4. Not factoring in the effect of inflation

Inflation is the rate at which the price of goods and services increases over time. It’s an important consideration when planning your retirement finances, as inflation could steadily erode the purchasing power of your savings.

For example, the Bank of England’s (BoE; 17 September 2025) inflation calculator shows that in August 2025, you’d need £178,389.10 to purchase goods and services that cost just £100,000 in 2005.

However, inflation is often overlooked or underestimated in retirement planning because it’s unpredictable and hard to visualise.

I can help by using sophisticated cashflow modelling software to provide a clear picture of how different rates of inflation might affect your retirement income. We can then discuss appropriate strategies for protecting your wealth, such as:

• Maintaining a balance between cash savings and investments that offer potential for growth
• Maximising pension contributions while you’re working, especially following career breaks
• Exploring inflation-linked retirement income options, such as inflation-linked annuities
• Diversifying your investments across asset classes to mitigate the effects of inflation
• Regularly reviewing and adjusting your retirement plan in line with inflation.

Get in touch

If you’d like to know more about how I can help you and your adult daughters avoid common retirement planning blind spots and build long-term financial security, I’d love to hear from you.

Please get in touch by email at lottie@truefinancialdesign.co.uk or call 03300 889138.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, cashflow planning, or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. 

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

Workplace pensions are regulated by The Pensions Regulator.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

Approved by 2plan wealth management Ltd 5/11/25.