1 Month Makes all the Difference for Expat Women’s Pensions

Thanks to the terrible economic state we’re living in at the moment, we are all being forced to rein in our spending and do everything we can to make our money go far further.  And recent research shows that women are perhaps being even more negatively affected by the financial downturn than men.

Research from Scottish Widows, the UK based financial services company suggests that things are now so bad for women that increasing numbers of them are failing to save anything towards their retirement at all.  It’s always been a sad fact that the great pensions divide sees women at more risk of falling on hard times when they finish work, particularly if they face divorce at some point during their lifetime too.  However, the latest news that the current recession is preventing many women from saving anything towards retirement is frightening. 

But it doesn’t have to be this way – particularly for expatriate women who are living and working abroad.  We have decided that it is definitely time to explain to expat women how a single month can actually make all the difference for them when it comes to having a pension at retirement age, or having nothing…

The Scary Statistics and Frightening Facts

Are you saving for a pension?

Chances are, if you’re a woman you’re not saving for a pension, and if you are, you’re not saving enough.  Whilst nearly two thirds of men surveyed by Scottish Widows were on track for a comfortable retirement according to the amount they were putting by specifically for pension income, far less than even just half of all women surveyed came even close to saving enough.

The over fifties are the group in most need of help, because almost a quarter of women over this age are saving a big fat nothing into a pension scheme – because they can’t afford to because of the recession, an uncertain jobs market and poor returns being available currently on saved income apparently.

Expatriate Women Even More Affected

Women who live and work abroad for at least a part of their career, or who take a career break to accompany their partner overseas are at even greater risk of falling far short when it comes to having enough in the bank to have a comfortable retirement.

This is because during a planned short sojourn overseas many women stop contributing into an employer’s scheme or a personal pension back in their old nation, and they also lose out by paying tax overseas but not contributing into their old home nation’s scheme to ensure they build up enough tax credits to have a full state pension, (if one exists), upon retirement.

Those who take time out of work to go abroad are even more affected of course…and yet expatriate women are in a fantastic position to actually make far more out of their time overseas, in a purely financial sense.

One Month Makes All the Difference for Expat Women

The head of pensions market development at Scottish Widows explains that as a company they strongly believe that for one to have a comfortable pension, one should save a twelfth of annual income – i.e., if you put just one month of your salary away each year you could be on track for a comfortable retirement, and you could live the rest of the year unworried about your future retirement income - allegedly!

However, setting aside an entire month’s salary is clearly not practical for most people – but putting one twelfth of what you earn each month into a pension pot is possible – especially if you plan to do so, commit to doing so and take full advantage of the very flexible savings options you have as an expat.

Whilst onshore pension rules are strict - limiting the amount you can save, when you can take a pension income, how you can take your pension – offshore pension schemes such as the British government backed QROPS (qualifying recognised overseas pensions schemes) are the epitome of flexibility and really suit many expat women’s lifestyles and spending and savings habits.  For example you can bank as much as you can when you can, you can draw down from your pension pot when you want, you can have more choice in how and where your pension is invested, and the best news ever – you don’t have to buy an annuity with your QROPS or offshore pension scheme!

Expatriate Women Need to Take Action NOW!

Whether you can put away a twelfth of your monthly salary or just £10 a month there is a savings scheme available to suit you.  You may feel that working to save for a pension is unachievable for you at the moment, or you may feel that saving for retirement when you’re so far away from giving up work is ridiculous – but don’t worry.  No matter how old you are, how much you can afford to save, whether you want flexibility, guaranteed returns or the potential to really turn your savings into strong income potential, the offshore world offers you all the choices you need.

You need to speak to a financial adviser who can take into account your current financial situation, any future changes you may be thinking of making in your life, whether you’re planning on staying overseas or moving back home, and who can advise you according to your personal circumstances and find the right offshore savings path for you. 

To save something now is far better than saving nothing for a few years with the full intention of really saving hard in a decade or so.  The sooner you start, the better it is for your financial future.  What’s more, the sooner you start your savings commitment towards your long-term financial security, the easier it will all seem in the long run!  After all, once you’ve signed up to put away X amount each month, you probably won’t even notice it leaving your bank account. 

So what are you waiting for?  You need to secure your financial future TODAY!