I WAS on the phone to Santa this morning.
I have his mobile number, from the time I did his pension for him. I like to keep in touch once a year, just to check that the children of Northern Ireland will be getting what they’ve wished for this Christmas. You’ll be glad to hear that it’s all good.
Then, as usual, I was asking how the reindeer are getting on. There’s Rudolph of course, then Dasher, Dancer, Prancer, Vixen, Comet, Cupid, Donner and Blitzen.
But here’s the thing: that’s not all of them. Did you know about Santa’s secret - the tenth and most low-profile reindeer? I can, in this column today, reveal exclusively: it’s Olive.
She’s there in the song: “Olive, the other reindeer, used to laugh and call him names .... “
Well, maybe Olive shouldn’t be so smug, because (and now we get to money matters) as a lady reindeer she is likely to have significantly greater financial challenges in her life than the male reindeers, regarding her salary, her life plan and her income in retirement.
There are a number of well-documented socio-economic realities that mean that women, and female reindeer, need to pay more attention to their retirement planning than men.
First, earlier this year the pension giant Royal London revealed the extent of the ‘pensions gender gap’. On average, a retired man has £85 per week more than a retired woman, and the gap is widening – 10 years ago, the difference was ‘just’ £31.
This is partly due to women taking an extended career break to bring up a family, to the gender pay gap where women tend to earn less than men in their jobs, and the greater likelihood that, if they do return to the workforce after a parenting break, they are more likely to return to part-time work.
There’s also the rising state pension age, which means that many women who expected to receive their state pension at age 60 may now be 68 or older, before their state pension kicks in.
We know that this is partly due to our aging population, with more people drawing the state pension for more years. We have already told you that just this autumn the Northern Ireland Statistics Agency, Nisra told us that our over-85 population is now 37,000 and is growing five times faster than the overall population. This is a massive drain on the state pension fund, causing experts to say it cannot survive more than another decade or so, in its present form.
But this week, some brand new figures look set to turn the screws on the pension system even further.
We are having far less children than we used to, according to the respected medical journal The Lancet. In 1950 the average international fertility was 4.7 children, today it has nearly halved to 2.4.
But in the UK we are lower than that, at just 1.7 children on average. When the rate falls below 2.1, this is less than the replacement level, and populations begin to shrink in what is known as a ‘baby bust’. It’s happening right now in half of the world’s countries, mainly among the economically developed areas of UK, Europe, US and Australia, where there is greater access to birth control, and fewer deaths in childhood mean women are having fewer babies.
At the Oxford Institute of Population Aging, director Dr. George Leeson says that with fewer workers paying contributions into the state pension, workplaces are going to have to change, and even the idea of retiring at 68 will be unsustainable.
Shocking news if you are currently hoping that the state pension will form the major part of your retirement income.
The time for talking to an independent financial adviser, to make a more solid plan for your retirement, is now.
When we get older, Santa may no longer want us, on that snowy Christmas Eve. So don’t be like Olive, and sit smugly by. There are no Christmas presents, in terms of your pension, when you finally stop pulling that sleigh!
:: Michael Kennedy and Shaun Doherty are independent financial advisers and pensions specialists, and can be contacted on 028 71886005. Further information is available on the Facebook page 'Kennedy Independent Financial Advice Ltd' or the website www.mkennedyfinancial.com
