Menopause has finally entered mainstream conversation, but its financial impact is still often ignored. With career interruptions, the gender pay gap and rising health costs, many women face financial strain just as they hit peak earning years. Jeannie Boyle, financial planner at EQ Investors, explains how planning ahead with short, medium and long-term savings can help provide stability and choice during this transition.
A few years ago, the idea of a prime-time TV documentary about the menopause was unimaginable. It was something our mothers silently suffered through.
Now, largely thanks to Davina McCall, we’re more open about how the perimenopause and menopause affect us. Gen X women aren’t keeping quiet about how they are feeling.
If you’re a woman in your late 40s, it might feel like every conversation is about the perimenopause. Your social media feed is probably awash with information about the physical and emotional impacts you might feel, but the financial implications of menopause remain overlooked. All that collagen and ashwagandha costs money.
Understanding the financial challenge
The gender pay gap and career interruptions can mean we can get to our late 40s with a lower level of savings, investments and pensions as our male peers. Then perimenopause hits us as we reach our key earning years.
Research from AJ Bell’s Money Matters campaign, suggests that roughly one in 25 women reduce their working hours due to menopause, and one in 20 stops working altogether.
Clearly there is much to be done to make working environments better suited to women’s needs, but taking control of your own finances will give you more options during this phase of life.
How should we plan for this?
With clients in their 30s and 40s who want to build a financial plan, I talk about the need for three pots of money. The short term and long term pots are simple.
Your short term needs are covered by cash savings and your long term pot is your pension. But there’s also a less distinct medium term pot. You might not have a goal for this right now, but you don’t want it sitting in cash earning nothing and you don’t want it locked away until 57.
For women, this medium term pre-retirement ISA fund is so important. This is the money that’s going to give you more choices as you go through the perimenopause years. If your money has been working hard prior to hitting your late 40s, you’ll be able to deal with a reduction in income if you need to change how you are working or take some time off.
