“Imposter syndrome” describes an inability to feel your own success, despite objectively performing well. Those who suffer from imposter syndrome have a chronic lack of confidence in their own abilities, no matter how successful they are.

Studies show that women are significantly more likely to suffer from imposter syndrome. For instance, according to the Independent, 63% of women say they have rarely experienced true confidence.

Unfortunately, for many women, this lack of confidence can extend to their financial lives, and they may struggle to achieve their long-term goals as a result.

Read on to learn more about the gender confidence gap and how working with a financial planner could help your clients close it. 

Only 53% of non-advised women are confident about their retirement

Often, one of the key benefits of your clients taking financial advice is that it can provide peace of mind. They may be more likely to feel confident about their future if they have a clear plan for saving for retirement and meeting other long-term goals. 

Conversely, those who do not take advice may be more likely to feel unprepared for retirement, and women are more likely to experience this doubt.

Indeed, as reported by Professional Adviser, only 53% of women who don’t work with a financial adviser feel confident that they are able to retire when they want to. 

In comparison, 63% of non-advised men said they believed they would be able to retire when they planned to. As such, there is a clear gender gap in retirement confidence.

This is unsurprising considering that there is also a large gender pension gap and women may be likely to have a smaller retirement fund than men.

Recent figures from the Department for Work and Pensions (DWP) show that the gender pension gap is 35% in 2023. In practice, this means that, at age 55, women only had £65 in uncrystallised retirement savings for every £100 that men had.

The gender pay gap likely contributes to this pension gap as, according to the latest figures from the Office for National Statistics (ONS), it was 8.3% in April 2022.

Additionally, the data shows that the gender pay gap is much wider for women over the age of 40. This may be because, as reported by the Institute for Fiscal Studies (IFS), women are far more likely to take a career break to care for children, even if they are the highest earner in the household. 

During this period, it may be more difficult to contribute to a pension, so women may miss out on valuable compound returns on their savings. Further to this, a career break could have a lasting effect on their earnings, making it more difficult to build retirement savings later in life.

As a result, your female clients may find it more difficult to contribute to their pension and savings, and this likely leads to a lack of confidence about their financial future.

74% of women say they are too nervous to invest

Investing is an important part of your clients’ financial plan because it can help them grow their wealth for the future and achieve their goals in retirement. 

It may be particularly beneficial right now as inflation remains high and investing their wealth could help them retain the value of their savings in real terms.

However, investing does require your clients to assume some level of risk, and surveys show that women may be less willing to do this.

Indeed, MoneyWeek reports that 74% of women do not invest because they are not confident enough. On the other hand, only 58% of men report this anxiety about investing.

Interestingly, 61% of women also said they have definite future savings goals, compared with only 49% of men.

This suggests that women do prioritise future planning and have a desire to grow their wealth for retirement. Unfortunately, their lack of confidence may stop them benefiting from the potential growth of investments.

Advice could give your female clients more retirement confidence

The report from Professional Adviser found that 59% of women who sought advice were confident they could retire when they wanted to, and 69% were confident they knew how much they needed to save for retirement.

This is a notable increase in confidence compared with non-advised women, and there are several reasons for this.

Firstly, a financial planner can explain concepts such as pension contributions or tax relief to your clients. This may benefit those who don’t necessarily understand how much difference increasing pension contributions can make to their retirement fund, for example.

It also gives clients a sense of control because they have a better understanding of their own finances and the factors that may affect them.

Additionally, a financial planner can use cashflow planning to give clients a clear picture of what their finances look like and how their situation may change in the future. They can then use this information to set clear goals and track their progress as they work towards a secure retirement.

Finally, a financial planner can explain how various investments work and help your clients balance risk effectively. Ultimately, this means that they can invest with confidence and grow their wealth for the future.

Get in touch

If you have clients that lack confidence about their retirement, we can give them the support they need.

Please contact us at hello@ardentuk.com or call 01904 655 330. As an award-winning financial advice company that was a 2022 VouchedFor Top-Rated firm, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

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

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 results. 

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.

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.