Top pension planning tips for women

Research released recently revealed that women in the UK currently face retirement incomes of £4,900 lower per year than men. Although women’s average annual retirement incomes will hit a record high of £16,900 this year, this is still markedly lower than male retirees, who average £21,800 a year in retirement according to latest figures.

The research by Prudential also showed that one in six women will have a retirement income below the minimum benchmark standard of £9,982 set by the Joseph Rowntree Foundation, compared to one in ten men.

It has been interesting to read the media commentary on these facts. Some are framing the statistics in a positive light; hailing the new ‘record high’ averages; others note the gap that still exists between the sexes. Whilst it is encouraging to see the gap between men and women’s pensions narrowing, we think there’s still a long way to go.

So here we offer women some food for thought around paying into pensions and closing that gap.

Earn as much as you can

The main reason that women pay less into their pensions than men is that they earn less. So the number one tip is to try and ensure you’re earning the maximum you can. Far too many women still shy away from asking for a pay rise. If you think you should be paid more or are earning less than the industry average for your role, don’t be scared to approach your employer about it. If you know or suspect you are being paid less than a male counterpart, this is unlawful. Approach your employer in a well-structured, measured and positive manner. Remember that if you are paying into a workplace pension scheme and you earn more through knowing your worth, your employer will also pay more into your pension as pension contributions are usually based on a percentage of your salary.  So a pay rise will not only boost your income now, but also into the future.

This is particularly important for women who are in lower paid industries, or are earning less due to working part-time hours.

Save as much as you can

Recent statistics from the Department for Work and Pensions (DWP) show that 84% of workers who qualified to be in a workplace pension actively took part last year. This is a real victory for auto-enrolment pensions; the 84% figure is a dramatic increase from when they were introduced in 2012.

However, there are real concerns that the amount people are setting aside is too low a proportion of their earnings, leaving the distinct possibility of a shortfall by retirement age. The current minimum level of contribution into defined contribution workplace pensions is only 3% from the employee and 2% from the employer, totalling 5% of income. Although this is set to rise to a total of 8% by April 2019 (5% from the employee and 3% from the employer), many commentators say this is still too little.

If you are able to accumulate ‘savings’ after all your monthly outgoings, you should seriously consider directing some of this into your pension.  The longer you can leave a pension fund to accumulate; the better off you will be thanks to the effects of compounding (the process of reinvesting any gains made). Starting to save as early in life as possible is also vital to benefitting from compound interest.

Understand the impact of decisions

The effects of earning less than men are made worse by the fact that many women take career breaks or change to part-time work – often following on from having children but also to care for older relatives. We’re not decrying these important, noble choices that are essential for our society: we know family comes first and you can’t buy or get back precious time with loved ones.

However, we are saying that you should at least be fully aware of the impact these decisions can take on your long-term finances. Most of the time we base changes in our working patterns on the immediate affordability, not considering that part-time working or a career break will mean we will also be paying less into a pension. More needs to be done to communicate the impact that such decisions can have on retirement savings. Although money isn’t the only factor when making life decisions, it is at least important to know about and understand all the financial outcomes. If you take a career break or reduce your hours, be aware that you will contribute less to your pension fund during this time, and may need to return to try and make up for the shortfall later on in your career.

The same applies if you decide to set up your own business or work for yourself, which a growing number of women are doing. It may be a struggle financially in the first few years and paying into a pension comes bottom of the list. When the fruits of your labour start to pay off, you should think about setting up and contributing to a private pension plan.

For more advice on any aspect of pension or financial planning, contact us and one of our advisers will be happy to answer your questions and help you out.



Top Financial Planning Tips for 2019

If you can believe it, 2018 is almost drawing to a close. Getting to grips with your financial affairs at the start of a New Year is always a good idea, as it will not only help you save money in the coming months, you could also find that you are better placed to make money from your investments.

So here are my top tips to improve your finances in the coming year.

  1. Have a financial plan – Approaching your personal finances in the same way a business approaches its annual planning may seem like a strange strategy, but it really does work.

You don’t really need to create an incredibly detailed plan with profit forecasts for your household, but you should create a set of financial objectives for the coming year. Goal setting is one of our favourite motivational techniques at Addidi – once you know where you are headed, you can work out how to get there.

  1. Budgets – It sounds boring, I know. But if you get your budgeting right then you will have more money available to enjoy yourself, which can only be a good thing.

The biggest stress you are likely to face is having a lifestyle not matched by the amount of money you are earning. Often when we take a good look at our finances, there are always things that we pay for that could be cancelled to save money. For example, unused gym memberships, Netflix subscriptions when you rarely watch it/could share with someone else, or long-standing subscriptions to magazines you no longer read. All of these little expenditures in a month can soon add up, and you are essentially just throwing money down the drain. So, stop wasting money and start saving it, or if you really cannot do that, then at least make sure you are getting full enjoyment out of the things you spend monthly money on.

  1. Compare your insurance and utility bills each year and make sure you are getting a competitive quote. It may seem like a chore, but when it comes to your insurance and utility bills it really is worth checking the details each year. You can use comparison sites to help you do this, and for a small investment of time you can make big savings.
  2. Do not borrow unless it is for something big and important – debt has become such a way of life for many of us that we have forgotten the art of saving and waiting for something we want. In the finance advice industry we classify bad debt as when you borrow to fund an unsustainable lifestyle, such as for holidays or buying furniture you don’t really need. While good debt would be, for example, to buy a home. Stick to good debt, and otherwise save for what your heart desires. You will value it more for the wait and delayed gratification is good for the soul.
  3. Risk – the amount of risk you will take with investments is something so personal, it is quite difficult to talk about generically. But one thing is for sure – you should never be taking investment risks that stop you sleeping at night.

You can afford to take higher risks for longer-term savings such as pensions, because if things do not go your way then you will have enough time for markets to recover. But your short-term saving goals (such as your pot for a deposit on a new home) should not be risked.

  1. Insurance – home insurance is one thing, and car insurance is obligatory. But for many people that’s as far as they get when it comes to insuring their valued assets in life. Failing to insure your income, your life or your health could cost you a lot more than you expect if you become critically ill. Expand your thinking on insurance towards income protection and critical illness cover. You will be so thankful you had it if something unexpected happens, and it is likely to cost a lot less than you think.
  2. Write a will – Around two thirds of us do not have a will. By neglecting to make one, not only are we leaving behind a major headache for our loved ones, we are also potentially handing our worldly goods over to the Treasury which gains tens of millions of pounds each year from people dying intestate.

Writing a will does not have to be complicated (especially if your financial affairs are relatively simple), and it can save your estate a lot of money in inheritance tax if you fall into this bracket. Many people think only the very rich pay inheritance tax, but thanks to a combination of rising house prices and little movement in the IHT thresholds over the years, many people now become 40% taxpayers for the first time after they have died. It doesn’t have to be this way, so take the time to write that will.

Bear it in mind, it is certainly better to speak to a solicitor before doing so as homemade wills often cause more problems than they solve.

  1. Be happy – sounds obvious, right? Still, getting your finances in order is one of the best ways to relieve unnecessary stress you might be suffering from. Every problem has a solution – it might just take a little time and effort. So don’t lose heart, never bury your head in the sand, and get the help you need sooner rather than later. When you have everything as it should be, then that is the time to enjoy the fruits of your labour.

Happy planning!


Running your life more like a business

Being a successful woman in business is one thing – managing accounts, tracking your company’s profitability, negotiating strong deals for your enterprise. But how good are you at running the family finances? Even the most potent CEOs or entrepreneurs can have trouble dealing with family money because there is one major thing many of us fail to do with our personal finances – deal with them as if we are running a business.

This may sound an odd thing to suggest but when you think about it, dealing with your family’s personal money should ideally be approached in exactly the same way as you would run a business. Of course, when it comes to family, this is so much harder to do. Our own money is tied up in emotions and family decisions, which makes it more difficult to handle with dispassionate rationality and the calm analysis of a businesswoman in action. If you can learn how to sidestep some of that emotion by approaching your own money with more of a business sense, you will reap the rewards from extra efficiency and ability to think clearly.

For example, good businesses are built on strong balance sheets, where a clear idea of profit and loss is second nature. Most business owners can tell you exactly where their balance sheet stands at any time. Most people cannot say the same of their own financial affairs, so becoming more disciplined and organised with them will start to help straight away.

Now, I’m not suggesting that you start creating profit and loss accounts for your own personal finances (unless you want to of course!). But I am suggesting that you become more aware of what you have coming in and going out at any one time. Initially, this would involve sitting down with all of your paperwork relating to income – bank statements, wage slips, dividend receipts, portfolio reports, savings account interest statements – anything and everything that will tell you what income you have.

Once this is established, take a look at your outgoings – taxes you have to pay, fixed expenses such as those related to property, utility bills, loan repayments, school fees, and other expenses such as gym memberships or other clubs. Check whether there are any other areas where you could trim the fat, such as discretionary expenses where you could either get the service for less, or do without it altogether. You may even find things you are paying for that you had forgotten about and no longer use, in which case get round to cancelling them right away and stop spending money unnecessarily.

With both of these established, you can then work out your home finances equivalent of your profit and loss to see what free cash flow you have from your household income that could be used to save. Even if you are very wealthy, there is no point in wasting money in areas where you could put that money to better use. Just as in business, you would not allow profits to be drained by a cavalier approach to the way your company’s money is managed.

Having done the hard work with your income and expenditure, you may also want to go as far as outlining all of your assets too – this is especially useful if you are making a will, or want to get a good idea of your overall net worth. Include everything from property you own, collections such as antiques or paintings, investments, cars, and anything else you can think of. If there is debt against any of these, such as mortgages or car loans, then subtract that to get the overall value of your assets.

So take a lesson from the business world and mindset for your personal finances, and watch them a little more closely. You might be surprised just how much more you can do with the money you have.

How Addidi inspires change

‘Inspiring change’ has been our theme for 2018. So many initiatives, campaigns and collectives are being formed with the aim of promoting women’s advancement worldwide, and it’s a cause we at Addidi fully applaud. But while we often think that challenging the status quo and fighting oppression is something more essential in countries where woman are less well represented, it would appear the UK is still behind the times too.

Although the gender pay gap is narrowing year on year, women working full-time can expect to be paid 9.1% less than their male counterparts – according to a 2017 study from the Office of National Statistics. That equates to an average of £100 a week, and as a result calls for companies to publish their gender pay gaps are growing louder.

While equal pay legislation has gone some way to narrowing the gap, it has failed to totally eradicate this embarrassing issue. In this day and age, why should women receive less pay for equal work?

Discrimination remains present in the workplace – and it is unfortunately true that the higher you climb, the fewer women you will find there. A recent study published by the Economic Journal confirms this kind of gender bias in the workplace. The research found that the UK’s biggest companies were only likely to appoint a female director if the post was just left by another woman.

The percentage of female directors on the boards of FTSE 350 companies increased from 2% in 1996 to 8% in 2010. Although progress has been made since then (mostly thanks to the efforts of women making a difference through organisations such as the 30 Percent Club and Women on Board), we still have to contend with the fact that whereas women had a 20% chance of obtaining a position that was left open by a woman, this fell to 10% when the post had previously been held by a man.

The EU has set itself the ambitious target of achieving 40% female representation on listed companies’ board of directors by 2020 – this is something that we believe must happen. In addition to the benefits it would have on the economy (many studies have shown that gender-diverse boards outperform male-only boards), boards at the top level could benefit greatly from the diversification, unique skill sets and refreshing leadership styles that women bring with them.

By their very nature, women are natural opportunity experts, able to breathe life into their ideas and inspire others to do the same. Women are great at cultivating strong relationships and thrive on facilitating connections between people. Women are also natural givers, with twice as many women running social enterprises as opposed to leading small businesses.

Now is the perfect time to think about how we – the government, business leaders, and women – can help unlock the full potential of women and ensure we put an end to an unfair state of inequality that does us all a disservice.


‘Harnessing the Power of the Purse’ research – what women want from their financial adviser

We were approached by the Centre of Innovation ( a few months ago who were conducting some fascinating research into what women wanted from their financial advisers – titled ‘Harnessing the Power of the Purse’ and presented in parliament in May.

As a female-focused financial advisory business, they were interested in our extensive experience of advising women on wealth. And of course being the collaborative, open business we are – we were happy to help. Before the launch, we were asked if we would connect the researcher with a couple of our clients, as the research seemed to be highlighting that the Addidi way of doing business met many of the key needs of the female consumer as identified by the research. We were more than happy to do so.

It was truly heart-warming to have one of our clients quoted and featured at the research launch event at the Houses of Parliament on 22ndMay. So what are the key findings of this report, and what is it that Addidi doing that is so cutting-edge?

Key UK findings:

  • Much female wealth is unmanaged; 56% of those surveyed did not have a financial adviser.
  • Many women do not feel their adviser either understands them or is interested in them; 73% did not feel their adviser understands them, whilst 87% felt their adviser was not interested in them.


Women define wealth differently to men. Whilst investment performance is also important for women, 77% of women across the globe say “making a positive impact on society” is important to them too.

So what are women looking for from their advisers, and what is Addidi providing along those lines? They want advisers who:

  1. understand them
  2. create a safe space for them
  3. educate them
  4. help them align their investment and life goals


Addidi is quoted as creating the following for women: “a room of their own to manage their wealth and feed their soul”.

Whilst we may talk numbers (after all we wouldn’t be great financial advisers if we didn’t!), our position will always be centred round mutuality, inclusiveness, inspiration, and a nurturing disposition. We add value where it matters, and in the process feed our own soul too.

Check out the findings for yourself at:

Like to know more about how we work? We’d love to hear from you.


How do you bring real wealth into your life?

Wealth management is often seen as the preserve of the money-oriented, but a new psychology of wealth is emerging that suggests a rise in more human motivations for building businesses and portfolios. In our long history of advising on financial matters, many of our client conversations come down to this question – “what does real wealth mean to you?’. To some, real wealth means more time spent with their family and friends. To others, it’s the satisfaction of seeing their business interests thrive and leaving a legacy they can be proud of.

One of our main fascinations at Addidi is this link between happiness and wealth – we think that where these two areas intersect is where ‘real wealth’ lies. Wealth creation can bring incredible meaning to your life when it’s done to create real joy in your life and for people around you, as we see with our clients all the time.

The recent 2018 Gallup World Poll paints an interesting picture of the relationship between wealth and happiness around the world. Over 1.7 million participants in 164 countries were surveyed and asked to rate their emotional wellbeing and life satisfaction. Researchers reported a ‘satiation point’ in the link between increased wealth and happiness – at which an increased household income stops positively impacting life satisfaction. An increase in wealth stops increasing self-reported emotional wellbeing at an average annual income level of £46’000.

Perhaps it makes some sense that income can only generate so much joy – once you have a certain level of financial security and enjoy a reasonable amount of luxury in your life, a simple increase in your bank account is not a one way ticket to eternal bliss. However, in the lives of the well-rounded entrepreneurs and stakeholders we work with, we do see a great deal of happiness linked to the success and attainment in their lives.

As a wealth management company that helps our clients plan their way towards peak happiness, we are fascinated with what might lie beyond that satiation point of income vs. happiness, and how we can use our observations to help our clients reach for their best lives. If you are lucky enough to enjoy an aspirational level of material wealth, it makes sense to us that we should be able to guide you towards an aspirational level of happiness and emotional wellbeing as well.

Looking candidly at the wealth management picture – a strong portfolio needs an emotional reality around it for it to mean something. The generation of wealth and managing your assets involves a lot of hard work and planning – it’s good to remember from time to time what you’re doing it all for. It’s true when they say “you can’t take it with you”, and although we always help our clients to plan robustly for retirement, we also like to make sure we are advising our clients to fully enjoy the here and now.

We advise our clients to nurture the important relationships in their lives and invest in them just as much as any financial asset. The Gallup Poll researches suggest that high-earning individuals had their emotional wellbeing depleted by the pitfalls that come with success: higher demands on their time, heavier workloads, greater responsibility, higher stress levels.

The research suggests that finding that space of ‘real wealth’ is all about balance – finding harmony between generating wealth and taking the time to enjoy it. We have a practice of advising our clients to find a way to enjoy their here and now, whatever that means to them. As human beings we tend to delay our happiness to an ever-moving date in the future – when a certain job or income level or bank account figure has been achieved.

The evidence is there – so why wait. Make time for their family, reignite old friendships, take that holiday, value your employees, invest in enterprises that mean something to you. These are all actions we would advise to make sure you’re building real wealth into your portfolio.