IRREGULAR INCOME AND FAMILY COSTS LEAVE FEMALE ENTREPRENEURS FACING A PENSION GAP
FEMALE ENTREPRENEURS PUT RETIREMENT AT RISK AS BUSINESS AND FAMILY PRESSURES COLLIDE
Only 38% of female business owners surveyed are confident they are on track for the retirement they want, as irregular income, business reinvestment and family responsibilities push long-term financial planning down the priority list.
Female entrepreneurs are prioritising business growth and family responsibilities at the expense of their own long-term financial planning, with new research suggesting retirement remains a secondary concern for a large majority.
Research from Rathbones and The Women’s Chapter found that 80% of female professionals surveyed are not prioritising retirement planning, while only 38% of female business owners feel confident they are on course to achieve the retirement lifestyle they want.
Among those considering their later-life finances, only 20% identified retirement planning as a key priority. Some 30% said retirement could wait while they concentrated on growing their businesses.
The findings highlight a financial dilemma facing entrepreneurs: capital that could be directed towards pensions and other long-term investments is frequently competing with the immediate funding requirements of the business that generates their income.
IRREGULAR INCOME EMERGES AS THE BIGGEST BARRIER
Unlike employees receiving predictable monthly salaries and workplace pension contributions, entrepreneurs can face significant fluctuations in personal income as business conditions change.
That uncertainty appears to be having a direct impact on retirement provision.
Some 60% of respondents identified irregular income as the biggest barrier to saving for retirement, while 55% said they had too many competing personal financial priorities.
Another 21% said they were concentrating on reinvesting profits into their businesses.
For entrepreneurs, that reinvestment may support expansion, recruitment and future enterprise value. But relying too heavily on the business as the foundation of personal wealth can leave owners with less diversification outside the company.
THE ‘SANDWICH GENERATION’ ADDS ANOTHER FINANCIAL PRESSURE
The research also points to the effect of caring responsibilities on the finances of female business owners.
Almost three in ten respondents, 29%, said the cost of caring for family meant they were saving less for retirement, while 26% expected family care commitments would force them to work for longer or delay retirement.
Rebecca Williams, Financial Planning Divisional Lead at Rathbones, said: “Many female entrepreneurs are facing a ‘sandwich generation’ challenge, balancing the demands of running a business while supporting both children and ageing parents. When combined with irregular income and pressure to reinvest in a growing business, it’s easy to see why retirement planning slips down the priority list.
“Entrepreneurs play a vital role in driving innovation, employment and economic growth, but many are putting their own financial futures on hold while they build successful businesses. As policymakers focus on strengthening retirement provision and supporting entrepreneurship, it’s important that business owners are not overlooked. The women helping to drive growth today deserve to feel confident about their financial future too.”
BUSINESS SUCCESS DOES NOT AUTOMATICALLY CREATE RETIREMENT SECURITY
For founders, the value accumulated inside a company can create a perception that the business itself represents a retirement strategy.
But the research indicates that conventional personal investment provision remains far from universal among entrepreneurs.
Previous Rathbones research found that almost a quarter — 24% — of entrepreneurs did not have a pension, while 36% did not hold an ISA, despite the majority having cash savings.
The figures raise a broader question about how effectively business owners are converting entrepreneurial success into diversified personal wealth.
Michelle Pughe-Parry, Founder of The Women’s Chapter, said: “The women in our network are juggling an extraordinary number of competing priorities. They’re growing businesses, creating employment and helping drive economic growth, while at the same time supporting children, ageing parents and managing their own finances.
“It’s therefore unsurprising that retirement planning is often pushed down the to-do list. But building a successful business shouldn’t come at the expense of long-term financial security. The women helping to drive growth today deserve to feel confident about their financial future too.”
A POLICY CHALLENGE FOR ENTREPRENEURIAL BRITAIN
The findings arrive as the government looks at improving retirement outcomes while reducing barriers facing business owners.
Much of Britain’s pension infrastructure is designed around conventional employment, where contributions can be automated through workplace schemes. Entrepreneurs frequently have to make those decisions themselves while simultaneously managing cash flow, investment and the financial requirements of their companies.
Williams said policymakers should ensure business owners are not overlooked as retirement provision evolves.
“Building a successful business and building long-term financial security should not be mutually exclusive,” she said.
For female entrepreneurs in particular, the research suggests the challenge extends beyond simply persuading people to save more. Irregular earnings, reinvestment requirements and family responsibilities are competing for the same financial resources.
The result is a potentially significant long-term trade-off: women building businesses, creating jobs and generating economic value today while postponing decisions about their own financial security tomorrow.
