14
Oct
2024
A woman meets with her financial planner in a corporate office.

3 ways I could help you to mitigate the impact of menopause on your financial wellbeing

World Menopause Day falls on 18 October each year. The event seeks to raise awareness of the support available for women who are going through menopause as well as to break the stigma associated with talking about menopause.

The menopause may affect you in a variety of different ways, including your physical and mental health. It could also have an impact on your financial health if symptoms are severe enough to cause you to reduce your hours at work or take early retirement.

Read on to find out more about how menopause symptoms might affect your finances and how a planner could help you continue working towards your long-term goals.

Many women reduce their hours or leave the workforce as a result of menopause symptoms

The BBC reports that 8 out of 10 women go through the menopause while they’re still working, but few feel they receive adequate support while they manage their symptoms.

Symptoms can be different for everyone and range in severity. They may include:

  • Fatigue
  • Anxiety
  • Brain fog
  • Joint pain
  • Headaches
  • Hot flushes
  • Night sweats.

The impact of these symptoms on your ability to earn could be significant. The BBC article reports the results of a survey of 2,000 working women aged 40 – 60, which found that 23% of respondents were considering resigning from their position because of menopause symptoms. Moreover, 14% had already decided to resign for this reason.

For women who don’t choose to leave the workforce, the financial cost of sick days, unpaid leave, and missed opportunities may be high. The report shares that women in the US lose a combined $1.8 billion a year.

Leaving the workforce earlier than planned may have a significant impact on your pension savings

The symptoms of menopause and perimenopause – the transitionary period leading up to the menopause – usually begin between the ages of 45 and 55 and can last between 7 and 14 years. This could coincide with some major career milestones; the Office for National Statistics reports that, in 2023, the average age to achieve peak earnings in your career was 47. You may also be planning to contribute more to your pension to save towards your retirement.

As such, if the symptoms of menopause cause you to reduce your hours at work or leave the workforce entirely, it could have a lasting impact on your finances.

For example, you could miss out on:

  • National Insurance contributions towards your State Pension
  • Tax relief on the pension contributions you’re no longer making
  • Pension contributions, including your own deposits and employer-matched contributions.

Royal London has created a helpful example to demonstrate how stopping work could affect a 50-year-old woman earning £40,000 with a pension pot of £100,000. This assumes wage increases of 2.5% each year, a growth rate of 5% (not including charges) and total contributions of 10%, split between the employee and her employer.

  • If she continues to work full-time until the State Pension Age (66 in 2024/25), her pension pot could be worth £355,510 when she retires.
  • On the other hand, if she reduces her hours by 50% at age 50, her pension pot could be worth £292,356 by the time she reaches State Pension Age.
  • And, if she had stopped working at age 50, her pension pot may only be worth £229,202, which is £126,000 less than if she’d continued working to age 66.

As you can see, reducing your hours or retiring early as a result of menopause symptoms could have a detrimental effect on your retirement savings. This could hinder your ability to achieve your long-term goals and enjoy the retirement lifestyle you’re hoping for.

3 ways I could help you to mitigate the impact of menopause on your financial wellbeing

It’s impossible to know exactly how the menopause might affect you personally. Fortunately, it is possible to take proactive steps to help protect your financial wellbeing.

Here are three ways I could help you to do this.

1. I can provide guidance to help you build your pension pot

Together, we’ll explore how you could build up your pension savings early. So, if you do need to take time out of work later on to manage menopause symptoms, it’s less likely to affect your long-term plans.

If you are able to contribute as much as you can to your pension while you’re working, you could feel more confident that your financial future is secure, regardless of how any future menopause symptoms affect you.

2. Cashflow modelling could help you to see how early retirement might affect your finances

Cashflow modelling is a tool I can use to help you visualise how early retirement might affect your finances. Together, we can create an illustration of your income needs both now and in retirement and see how your existing savings and assets could help you to pay for these expenses.

This way, if you need to reduce your hours or retire to help manage your menopause symptoms, we could spot if this might create a shortfall in income later on. Then, we can take steps that could help mitigate the impact of this.

3. I could be a trusted partner taking care of your finances for you

If you experience severe symptoms of menopause, managing your finances might feel overwhelming and fall to the bottom of your to-do list. Working with me could help you feel more confident that your savings and investments are in safe hands.

We’ll have regular meetings to review your portfolio and pensions to reassure you of your financial position. This could take a task off your to-do list, hopefully reducing your stress and enabling you to do what’s right for you.

Get in touch

To find out how I could help you build a financial plan that helps enable you to achieve your long-term goals no matter what life throws at you, please get in touch.

Email marnel.stafford@fosterdenovo.com or call 07305 970959 or 0207 469 2800 to learn more.

Please note

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

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate cashflow planning.

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 performance.

A pension is a long-term investment. The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Pension income could also be affected by interest rates at the time benefits are taken.

Pension savings are at risk of being eroded by inflation.

The tax treatment of pensions in general and tax implications of pension withdrawals will be based on individual circumstances, tax legislation and regulation, which are subject to change in the future.

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.

Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.

Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement.

Workplace pensions are regulated by The Pension Regulator.