Women's Risk in Life by the Chartered Insurance Institute Part 3

Women will experience longer life expectancy, longer periods of ill-health in later life, and a greater need for care, resulting in higher and more unpredictable costs of care than men. However, many women are not preparing for the costs of care

·   A girl born in 2014 can expect to live to 83.2, nearly four years longer than a boy born on the same day.

·   Women can expect to face 19 years of ill-health typically – from age 64 until age 83 – three years more than a man. On average women will need help to carry out basic tasks for nearly 3 years, compared with 1.5 years for a man.

·   At age 65, women can expect to pay £70,000 on care throughout old age, compared with just £37,000 for a man. A woman entering a care home between the age of 65 and 74 can expect to stay for four years, at an average cost of £132,000. Costs in some areas are far higher, with an average of £186,000 in the South East. These figures are the average, and some may face longer stays and far higher costs.

·   Over half of women in their 30s have not thought about how they will pay for care costs.

Women are marginally more risk-averse than men – but evidence is mixed and the impact of other factors such as education and income level seems to be more significant

• Women are slightly more risk-averse and slightly more ‘present-biased’, but this is largely explained by income and motherhood.
• Women are more likely to report that they lack knowledge relating to financial decisions and to want information and advice.

Women, as a result of lower incomes and greater insecurity at work, are less likely to be saving for a pension than men and there is a very large gap by retirement

·   During the years in which women have young children, they have fewer savings than men, reducing their resilience to economic shocks. Men in their late 30s have 60% more in savings than women the same age.

·   Men are more likely to have a private or occupational pension, and they save much more. Women are more likely to have a Defined Benefit (DB) scheme than men, due to a greater likelihood of working in public sector, but access to DB schemes is falling. The average man retires with a pension pot five times higher than the pot an average woman retires with.

Women’s lower savings and pensions wealth means they are more likely to be dependent on others and to be less financially resilient when relationships break down

·   80% of women under 30 agree they are not saving enough for their retirement, compared with 75% of men.

·   Most women in the bottom 40% of households with a household income have no pension wealth at all.

·   Women are more likely to say they will be reliant on the state pension as their main source of income in retirement (36% compared with 30%) – women who are divorced, separated or widowed are particularly likely to be reliant on the state pension.

·   The average divorced woman has less than a third of the pension wealth of the average divorced man – £9,000 compared with £30,000.

·   Most separated woman have no pension wealth at all.