£400k – the shortfall for younger women in retirement

Younger women are misjudging the pot they will need to fund their desired income in retirement by more than £400,000. That was the finding of a study by BlackRock, which looked at the average amount 25-34 year olds would be beneath what they need after work.Some 64% of women in this age bracket have not yet started to save for retirement.The belief among those surveyed was that £142,000 would fund their retirement.But for the household income of £29,000 per annum they said they desired, in fact around £555,556 would be needed.Juliet Bullick, head of inclusion and diversity for EMEA at BlackRock, said: "It is clear that there is a huge gap between what income young women say they need at retirement and the steps they are taking to help get them there."Worryingly, they are underestimating the retirement pot they think will fund their desired income in later life by more than £400,000."It's entirely understandable that young women have other financial priorities."{desktop}{/desktop}{mobile}{/mobile}The BlackRock Global Investor Pulse survey found women aged 45 and over had put funding a comfortable retirement at the top of their financial priorities.Yet for young women funding a retirement is way down their list of priorities.It was sixth behind paying off debts, growing wealth, saving for a deposit for a new home, paying off a mortgage and financing their children's education.Just 13% described themselves as 'actively investing'.The survey showed that young women had more than 80% of their savings and investments in cash deposits - the highest proportion of all age groups.Over a third of younger women thought that cash savings would help fund their retirement income.Researchers said this highlighted that many underestimate the longer term effect inflation can have on purchasing power – saying that a cash pot of £50,000 five years ago would only purchase £42,320 worth of goods today.Despite the findings about younger women's attitude towards retirement planning, it was this age group that were most likely to seek the help of a financial adviser to help them plan for life after work (39%).They also had the most interest in learning more about savings and investments with one in two wanting to be more knowledgeable (55%).Some 57% of all women who use an adviser said they felt in control of their financial future and 65% are confident that they are making the right investment and savings decisions.Ms Bullick said: "When retired women in the Investor Pulse survey were asked to reflect on what advice they would give to their younger self in preparing for retirement, more than two-thirds recommended saving as early as possible – as it stands, women are leaving prioritising their retirement till their mid-forties."The survey shows that women who take Financial Planning seriously are much more in control and confident of their financial future, than those that don't."

£400k – the shortfall for younger women in retirement

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