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As the new government looks to improve retirement outcomes and reduce barriers facing business owners, new research from Rathbones and The Women's Chapter suggests many female entrepreneurs are struggling to balance building successful businesses with saving for retirement.
Four in five (80%) female professionals say they are not prioritising retirement planning, highlighting the financial trade-offs many are making as they focus on growing their businesses and supporting their families.
According to a recent poll of female business owners and c-suite executives*, only 38% of female business owners feel confident that they are on track to achieve the retirement lifestyle they want, while more than three quarters (80%) admit that retirement planning is not currently a priority.
Of those actively thinking about their later life plans, only 20% said retirement planning was a key priority. The findings point to the difficulties entrepreneurs face in balancing their financial priorities, with 30% of those surveyed saying retirement can wait whilst they prioritise the growth of their business.
The uncertainty that can come with running a business is having a significant effect on later life planning with irregular income being the biggest barrier to saving for retirement, cited by 60% of respondents.
Over half (55%) said there were too many competing personal finance priorities to consider, and one-fifth (21%) said they were focusing on reinvesting any profits back into their business.
However, female business owners also noted the significant role family responsibilities play in shaping retirement plans. Nearly one-third (29%) say they are saving less for retirement due to the cost of caring for family and 26% expect they will need to work longer or delay retirement due to ongoing family care commitments.
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."
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.”
The findings also echo previous Rathbones research which found that retirement planning remains a challenge for many business owners more broadly. Separate polling found that almost a quarter (24%) of entrepreneurs do not have a pension, while more than a third (36%) do not hold an ISA, despite the vast majority holding cash savings.
Rebecca Williams added: "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 is important that business owners are not overlooked. Building a successful business and building long-term financial security should not be mutually exclusive."
