The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

It’s fair to say that many of my female friends are confused about the best way to save for retirement. They know they have to do it but just keep putting it off. After all we’ve all got  far more pressing priorities: new decking for the garden, a family holiday, even a savings account for the kids. But I know deep down it’s an absolute essential that my friends and I must take the issue of saving for retirement more seriously if we want to enjoy and embrace worry free finances in old-age.

I read recently that the gap between men and women’s retirement income is narrowing but women still have less to retire on. The typical sum men can expect to retire on in 2012, including company and state pensions is £15,500. Women can expect to retire on £12,2501.

Here‘s some of Scottish Friendly’s top tips to help my financial planning for saving for the future:

1. Do something about it now.

Regardless of age, stage of life or income, it’s really important for women to start taking retirement saving and investment seriously. It’s not a luxury….it’s an essential and, simply put, the earlier you start putting money away, the more you will potentially have to enjoy when you finally come to retire.

Most companies allow you to contribute to a pension scheme and many make reasonable contributions to help boost your pot. If you don’t like the idea of locking your money away, especially when it comes to your own personal savings and investments, then consider an ISA. Get into the regular habit of putting money away every month – soon you won’t even notice it coming from your monthly pay cheque.

2. Exploit the flexibility of an ISA.

ISAs are accessible; pensions generally aren’t. You can contribute as much or as little as you like to an ISA, subject to the annual ISA allowance, currently £11,280, and change the amount to suit your income at the time.  For example if you take maternity leave, you can reduce your payments to the bare minimum (or even stop them) but can still contribute to your pot.

What’s more you can calculate how much you are going to save and invest over the plan period, which makes planning for the future a whole lot easier.

But one of the biggest benefits of an ISA is that they are completely tax free (other than taxes on dividends from UK companies) which means much more money for you and less for the taxman.

The two most common ISAs are a Cash ISA or a Stocks & Shares ISA. A Cash ISA is quite simply a savings account which holds your cash and earns interest. A Stocks & Shares ISA is an investment ISA which means your money can be invested in the stock market, property investments and company and Government bonds. Importantly using a Stocks & Shares ISA effectively doubles your ISA allowance when compared to just using your Cash ISA. So why pay more tax than you need to?

3. Decide how much you can afford to save and invest – then get started!

For many women, especially those with young families, it’s very difficult to put any money aside from their monthly income. With that in mind it’s important to sit down and really work out how much you can realistically afford to save and invest. But remember putting aside something for retirement should be a priority and not just something you do when you’ve got extra cash.

Think about what you waste money on every month. Can you cut down your daily Starbucks coffee to three a week or shave £10 from your weekly food shop? This might just allow you to put away an extra £50 a month to your ISA.

The benefit of using an ISA becomes clear even when you are only putting a small amount away. Unlike a pension, you are completely in control and your money isn’t locked away forever. That means getting started can be much easier with an ISA. Once you start a regular savings and investment habit you’ll soon realise how easy and painless it can actually be. Before you know it you’ll be setting aside monthly sums of money that right now you just never thought possible.

4. Share in your partner’s dreams

Retirement should be about enjoying life, and doing the things you didn’t get to do when you were working. For many, that means sharing exciting experiences with a partner so talk to your other half about their retirement plans.  Do they match yours?

Are you both saving and investing enough to do what you really want to do together? Make sure between the two of you, you are saving enough to enjoy your well-deserved time together.

So now I know the importance of saving for my future and I’ve got some really good ideas on how to do it…..the challenge now is to get on and do it!

For more information on Scottish Friendly’s range of tax free savings plans or further information on saving for retirement log onto But remember Scottish Friendly does not provide financial advice and can only give information on its own products.  If you are in doubt of any aspect of financial planning, you should contact an independent financial adviser.

1Source:  Sky News, 8 June, from a report by Prudential Insurance.

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.