Consumer Corner: Five finance tips for women to make and save money
Challenges Of A Financial Specific Lot Are Female
Many women will face challenges in their lifetime when it comes to money. A lot of financial challenges are female-specific given that there could be effects from things like maternity leave or that a gender pay gap continues to exist. A Bank of Ireland survey found that women claim to be less confident than men in managing money and not as satisfied with their financial situation. The survey also found that women are less likely to believe they are knowledgeable about financial matters.
To help with all things financial we ask financial experts for female-specific financial tips ahead of International Women’s Day.
If there is a promotion on the table or a board seat up for grabs don’t be afraid to put your hand up to be considered. Ray McKenna, partner with Lockton Ireland says that while recent CSO findings suggest that progress has been made around female representation at board level and senior roles, it is clear that men still hold the majority of senior corporate roles. Boards need more female representation and if you don’t show an interest then you will not likely be considered. In 2023, just 25 per cent of Boards of Directors in Ireland were female while only 19% of chairpersons were female.
Financial expert Frank Conway says that it is often women who take time out of work to care for children and as a result many miss out on things like pension contributions and career prospects and because of that future earnings can be impacted negatively.
“This can range from lower pension pots and lower earnings. I recommend that they be aware of some of the options that are available to them in such events.”
He says that the real trick to developing long-term financial resilience is to start pension contributions early as there is tax-free growth that accumulates even if someone does take time out of work.
Financial knowledge is very important, according to Mr Conway. He says that a recent survey he did found that men and women have different types of financial knowledge. He says men expressed a greater level of understanding of investing and stocks whereas women expressed greater confidence in seeking out value and price comparison. “So, on a day-to-day basis, it could mean that some women may have a poorer understanding of investment risk and may avoid it as a result. This would be a limiting factor to future financial wellbeing. When one is younger, they have a capacity to take on more risk so they just need to develop the financial knowledge of how it works and then, take the appropriate level of risk when it comes to pension and even non-pension options.”
Mark Coan of moneysherpa.ie says he would recommend that everyone should bone up on their finances.
“Getting across this aspect of your life can not only empower you and enhance your life outcomes, but also provide much-needed peace of mind."
Generally, Revenue estimates that several hundred million euro goes unclaimed each year. Qualifying relief can be claimed for up to four years after an expense is incurred. This includes qualifying medical expenses, BIK on company-paid health insurance, work-from-home credit, backdating a pension and much more.
“In fact, I estimate there are about 75 different tax reliefs available in Ireland presently,” says Mr Conway.
Karen O’Flaherty, Senior Propositions Executive in Royal London Ireland says there are a number of steps which women can take to bridge the gender pension gap.
Working women who are not saving into a company pension, even though their employer offers them the opportunity to do so, should join that pension as soon as they can, even if they can only save a small amount into it, she says.
“In some cases, an employer will match an employee’s contribution into the pension scheme, so the more the employee saves into the pension pot, the more their employer puts in. All employees should maximise the contribution they can get from their employer. Also, on receipt of a salary increase, it can be prudent to use part of the increase to save into a pension.”
If this is not an option however Ms O’Flaherty says that you should instead open your own pension if you don’t have a company pension.
She also says that a promotion generally boosts the amount you can afford to save into your pension.
“In the event a salary increase is secured as part of a promotion or for another reason, use part of that increase to save into your pension.”
She also advises that, while not always possible, one of the best ways that mothers can ensure they have adequate retirement income in place in the future is to try and limit the time they take out of the workforce to care for children.
“Doing so will prevent them losing out too much on their pension, career and pay prospects.”