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By Alison Steed
BARCLAYS Stockbrokers has launched a new initiative designed to empower female investors, as two thirds of women say they are not confident investors, and lack the knowledge to make informed decisions.
Smartwoman is designed to encourage more women to make the most of their money through investing, especially as women are often more successful investors than their male counterparts.
Barbara-Ann King, Head of Investments at Barclays Stockbrokers, said: “Many women still do not do enough with their personal finances; SmartWoman is an initiative for women of all ages and levels of experience, dedicated to encouraging and inspiring more women to do more with their money. Research shows that women tend to take a long term view when it comes to investing and this composure allows them to ride out fluctuations in their investments, a great attribute for any investor to have. Historically, men have taken control of financial decisions and we hope that SmartWoman will empower more women to take charge of their financial future.”
Most women feel they lack the knowledge to make investment decisions, said Ms King, and often lack the time they need to invest. However, a third of women question for a survey by Barclays Stockbrokers said they considered themselves to be quite experienced, compared to half of men.
While women are traditionally more risk averse than men when it comes to investing, seven in 10 women said they would be happy to take risks to generate good returns.
Ms King added: “Women don’t hesitate to make financial decisions when running businesses and households, and there is no question that women are just as financially able as men. Investing is not just about trading; it is about making provision for the future, whether that is for yourself or for your family. Rather than being a bolt-on to everyday life, investing should be a central component of women’s lifestyles. Although we do have confident female clients that invest every day, this number is still dwarfed by our active male clients. More needs to be done to encourage more women to start making investment decisions for themselves. This is where we hope to help with our SmartWoman initiative.”
SmartWoman website: http://www.barclayssmartwoman.co.uk/
By Alison Steed
A THIRD of women retiring this year face a retirement in poverty with an income of less than £14,000 a year.
The minimum amount a single person can live on with a reasonable standard of living is £13,900 according to the Joseph Rowntree Foundation, but women will have a typical expected income of £12,169 according to insurance giant Prudential.
The findings prove that women need to take more interest in their pensions and retirement planning.
Vince Smith-Hughes, Prudential's head of business development for pensions, said: “Women are more likely to take a career break when they start a family and possibly the last thing on your mind when you're taking care of children and the home is how you're going to fund your retirement years. But as these figures clearly demonstrate those years out of work do have an impact," he said.
"Evidently there is a vast difference between men's and women's anticipated retirement income and we believe government and the retirement savings industry can do more to encourage men and women to save more into pensions," said Vince Smith-Hughes.
Prudential found earlier this year that 47 per cent of people believe they are financially well prepared for retirement, but the difference between perception and reality is vast.
Mr Smith-Hughes added: "Clearly there is a discrepancy between what people believe constitutes being financially well prepared for retirement and the actual income required to ensure that you are. This is not something that you should begin thinking about the year you retire, it takes time to plan for retirement and to work out what the best way of utilising your funds is so that you have the income that you want and, more importantly, the income that you need for as long as you need it.
"People should seek advice early to make sure they are well prepared for a retirement, which could easily last for 20 years plus."
The differences across the regions are stark, with the South West being particularly hard hit.
|Region||Percentage of people retiring on less than £14,000 a year|
By Alison Steed and Liz King
Are you a shopper or a spender? Would you rather put your money into shoes and handbags, or stocks and shares? Take this handy quiz to find out.
Online broker TD Waterhouse has put together a series of questions to help you identify whether you are more likely to splurge than save.
“While we all know it’s important to save money, the instant gratification of shopping can sometimes trump the peace of mind that comes from long-term investing,” says Sarah Dobson, UK Investor Centre Representative, TD Waterhouse, “but if you’ve ever woken up the following day with a “spending hangover”, you know the pleasure doesn’t last long.”
Finding the right balance between enjoying disposable income and building an investment portfolio to meet long-term goals is key. It’s never too early to start investing, and the earlier, the better, as additional time can allow an investment to potentially grow which means you may be able to benefit from compound interest. Although it may initially feel like a sacrifice, paying yourself first means that instead of simply living for the moment, you could possibly build the foundation for a wealthier life in the long term.
Ms. Dobson added that there can be many correlations between building a great wardrobe and building a solid portfolio. “Everyone likes to buy an ‘on trend’ piece or label but the foundation of your wardrobe should be those classic, timeless items that never go out of style.” She added: “The same is true for your investments - the bulk of your portfolio should be the equivalent of your LBD (little black dress): high-quality, attractive and reliable, rather than trendy.”
The Shopping or Saving? Quiz is designed to help would be investors think about whether they are striking the right balance between shopping and saving for their future. The quiz is available online at http://vote.pollstream.com/0464 along with tools geared to help calculate and project a hypothetical long-term investment goal, to see whether you are on track, and if not, how to get there.
By Alison Steed
There are only a few working days left to use up your individual savings account (Isa) allowance this year, and with up to 1.5m savers set to lose out, you should take advantage of this valuable tax break before it is too late.
This estimate is from research from Clydesdale Bank and Yorkshire Bank based on how many savers could miss out if they leave things until the last minute.
The over 50s will lose out on more than the rest of us this year if they fail to make the most of the Government’s largesse, as they can deposit up to £10,200 into a mix of cash Isas and investment Isas this tax year, increasing returns by as much as 28 per cent thanks to no tax being applied to gains.
By putting this maximum amount into an investment Isa each year until they reached 65, with a return of 6.5 per cent a year before charges, the fund could have grown to a whopping £312,447 by the time they reach retirement age. This means £160,000 in investment returns would have been out of the clutches of the taxman.
Tom Stevenson, investment director at Fidelity International, says, "If you are aged over 50, you still have the opportunity to contribute £10,200 before the end of this tax year. The simple fact is that, if you don't use this allowance and choose to leave your investments or savings outside an Isa, you're agreeing to give part of your investment return to the Government. As you can see from our figures, that could amount to throwing away a huge amount of money over the years. An Isa puts all the money back into your pocket and your pocket alone."
For the rest of us, the limit is £7,200 until April 5, but this will rise to £10,200 from April 6. But you cannot carry over any of your Isa limit to the next tax year, so use it now before you miss out.
You can put £3,600 – or £5,100 if you are over 50 – into a cash Isa before April 5, and the same amount into an investment Isa before the end of the tax year.
If you have already used up your allowance, you will have to wait until April 6 for your next Isa allowance to kick in. But you should use this sooner rather than later in the next tax year to get more benefit from tax efficient savings.
BRITONS are becoming a cannier nation when it comes to shopping around for the best deals on everything from houses and cars to furniture, but are seriously losing out on their pension income in retirement.
Nearly half of us would try to get a better deal on a house or sofa, but just one in 10 of us would bother to shop around for an annuity to give them an income in retirement. Yet a woman with a pension pot of £50,000 who lived for 20 years into retirement could be as much as £11,000 better off by doing a bit of leg work to get the best deal, according to insurer MGMAdvantage Retirement Nation survey.
Just one in five people are aware of the Open Market Option (OMO) which allows you to search out the best annuity payments available for you, and if the woman in the above example happened to be in ill-health, she could get an additional £4,000 in income over the 20 years.
Aston Goodey, Director of Sales & Marketing at MGM Advantage said: "It's a real concern that we are all so comfortable haggling over the price of a car or new sofa but so reluctant to look around or to negotiate over the price of a pension annuity. This is particularly worrying as you only have one chance in your life to shop around for the best possible annuity, but failing to do so could mean a difference of hundreds of pounds a month, and in some cases could even tip pensioners into poverty.
"We believe that many people close to retirement simply don't realise that they can shop around for the best annuity rate and increase their retirement income by such a significant amount of money. For instance, last year over 60 per cent of people buying an annuity chose the one offered to them by their existing pension provider. Shopping around is easy to do, especially with the help of a Personal financial adviser."
A third of us are simply unprepared for retirement, said Mr Goodey, and do not expect the drop in income they see in retirement.
The good news is that women are better than men at haggling over prices, and Londoners are far more accomplished, with nearly three in five prepared to barter over a price, while just a third of those in Northern Ireland would be prepared to ask for a discount.