Joanne Yoong, University of Southern California Center for Economic and Social Research
In a letter to his friend Jean Baptiste LeRoy in 1789, the American Founding Father Benjamin Franklin wrote “In this world, nothing can be said to be certain except death and taxes”. Franklin’s letter far predated the United States’ Social Security Act of 1935, which set up a social insurance programme for American workers, providing them with at least some degree of certainty about income after retirement. But, in today’s environment, to what degree do Americans feel secure about their retirement? How well do they understand their own role and that of Social Security in contributing to retirement security?
Researchers at USC conducted a new study in 2016 to collect data on American’s understanding of retirement preparedness and the perceived role of Social Security. A special-purpose survey was designed and fielded as part of the Understanding America Study (UAS), a panel of approximately 6,000 individuals aged 18 or over representing the entire United States. The survey results highlight a worryingly-low level of retirement–related financial literacy.
Seventy percent of survey respondents are relatively uncertain about their retirement-related financial literacy, rating themselves either “somewhat” or “not too” knowledgeable. More worryingly, both self-assessed and actual knowledge of retirement-related financial principles are lower compared to the 2009 results. This is consistent with findings reported by Annamaria Lusardi from the US National Financial Capability Study, which found that basic financial literacy has been declining in each survey wave since 2009. Just as worryingly, disparities in knowledge by age, income and education remain present across all our measures of knowledge and preparedness, with Hispanics and Blacks at a particular disadvantage relative to non-Hispanic Whites.
The survey also shows that respondents are more pessimistic about Social Security, in comparison to the 2009 study. In particular, most respondents do not feel confident in the future ability of the Social Security system to pay their promised benefits, and a majority expect the Social Security system to fall short of providing enough for a reasonable standard of living.
Results also suggest a clear gap between respondents’ expectations about Social Security, and their actual understanding of how it works, suggesting that many Americans may not be maximising their benefits, or may not even be aware of their full entitlements. While most people are able to identify the general features of the Social Security system, a sizable group do not grasp critical details relevant to the impact of their own benefit claiming choices. About a quarter of future beneficiaries mistakenly believe that benefits need to be claimed at the time of retirement, while one in five are unaware that claiming early can reduce benefits. Just over 10% are not aware of disability entitlements, almost 20% are unaware of survivor benefits for children, and almost 40% do not know that spousal benefits can be claimed even if they do not have children.
Combined with the findings of the OECD/INFE Survey of Adult Financial Literacy Competencies on the correlation between financial knowledge and retirement planning, the UAS results suggest the potential for further negative effects.
Previous research has established a causal relationship between financial literacy and long-term planning. This new study reinforces that becoming and staying informed is a decision in itself that poses its own challenges.
Most UAS respondents feel that it is very important for the Social Security Administration to educate people about how to prepare financially for retirement. When asked to assess different sources of information, UAS respondents were most likely to trust the accuracy of retirement-related information either from Social Security or financial professionals. However, in practice, they most often turn to their social networks or receive information from their employers, rather than proactively seeking information from these trusted sources. A pragmatic and forward-looking financial education policy therefore requires working with diverse groups of both private and public stakeholders, not only to provide the right information but also to prevent the spread of wrong information.
How will policy makers and practitioners know which strategies are most effective at reaching which consumers, and how effective they are at altering behavior or financial outcomes?
Some of the responses to these questions may be found in the 2016 OECD Pensions Outlook. In parallel, recent data collection efforts such as the NCFS and the UAS and, more generally, the OECD/INFE survey that are focused on tracking both financial knowledge and behavior are helping to generate new and relevant findings. The ability to follow individuals over time, and to link financial knowledge to other types of knowledge and behavior is equally essential. Matching survey responses to actual financial transactions data and re-administering modules regularly will allow assessment of behavioral changes as well as the respondents’ financial status over the longer-term as the economic and policy environment evolves.
For now, it is important to support both initiatives that aim to improve retirement preparedness as well as sustained investments in measurement and evaluation to ensure that such initiatives are effective. It may be impossible to provide absolute certainty about financial well-being in old age, but more can certainly be done to ensure that expectations are properly aligned and that Americans are making informed decisions about retirement, including decisions about their own Social Security benefits.
 The UAS panel is Internet-based, which means that respondents answer surveys on a computer, tablet, or smart phone, wherever they are and whenever they wish to participate. While most panel members have their own Internet access, those who do not are provided with Internet access by USC. Surveys are designed by research teams around the world and final datasets are posted on the USC website with sample weights. A number of these surveys, including ours, focus on economic and financial decision-making. These areas are also highlighted in the work carried out by the OECD/INFE.
 See Lusardi and Mitchell, “The Economic Importance of Financial Literacy: Theory and Evidence,” Journal of Economic Literature, March 2014, vol. 52(1), pp. 5-44.
Annamaria Lusardi (@A_Lusardi), Denit Trust Chair of Economics and Accountancy at the George Washington University School of Business; Founder and Academic Director of the Global Financial Literacy Excellence Center (GFLEC) and chair of the OECD/International Network on Financial Education Research Committee. She is also the academic advisor of the National Financial Capability Study which measures financial literacy in the United States.
The release of new data focused on Americans’ financial capability not only offers important insights and suggests additional areas for financial education, but it also points to opportunities for the financial sector, regulators, and others.
The 2016 edition of the National Financial Capability Study (NFCS) presents the results of the third wave of data collection since the study was first released in 2009. It provides new information while helping us to understand the changes that have occurred over this time.
The latest data show that Americans’ personal finances have been improving slowly but surely. For example, only 35% of Americans had precautionary savings in 2009, compared to nearly half (46%) of people six years later. However, the gains have not extended to everyone. More than one in three Americans state they would not be able to come up with 2,000 USD in one month if an unexpected need arose. The financially vulnerable include in particular, millennials, women, and individuals with lower income and educational attainment.
The latest findings also draw attention to three areas of great importance to Americans’ personal finances: student loans, indebtedness, and financial literacy. These areas are also highlighted in the work carried out by the OECD/INFE on financial literacy.
New questions added to the most recent NFCS survey expand our understanding of what is happening with student loans. For starters, educational loans have become commonplace. Nearly half (45%) of people aged 18-34 have a student loan for themselves or family members, as do more than a quarter of individuals aged 35-54. Despite this preponderance, the latest data show that —remarkably—borrowers fail to understand what they have taken on.
For example, about one in five respondents do not know the terms of their loans, such as whether monthly payments are determined by income. And the majority (54%) did not calculate the monthly payments when obtaining their most recent loans.
But ignorance is not bliss. According to the new data, 48% of student loan holders fear they will be unable to pay off that debt. If given the chance to do it all over again, a whopping 53% of loan holders would handle it differently. This demonstrates a clear need for advisory services and/or new tools to help people make decisions about student loans.
Data from NFCS have shown that individuals do not make sound decisions nor do they consider important factors when they take on debt. Building on this, a new question was added in 2012 to ask whether respondents have too much debt; the question was repeated in 2015. What emerges is striking. As many as 40% of respondents in 2015 agree or strongly agree they carry too much debt. Irrespective of the overall improvement in the economy, this proportion has changed little in the last three years.
Interestingly, over-indebtedness cuts across income, education, and age. While 43% of those with annual income below $25,000 feel burdened by debt, so do more than one third of those making $75,000 or more. At the same time, even though wealth accumulation should peak later in the life cycle and close to retirement, nearly 30% of those aged 55 and older report having too much debt.
The data also show that people tap many sources of high-interest debt, including credit cards, payday loans, and auto title loans. Again, these findings suggest there are business and policy opportunities for helping people make better decisions about debt.
A new question in the latest survey measures knowledge of interest compounding in the context of debt. What it reveals could explain why people are over indebted: only 33% of respondents know that it takes less than five years for debt to double if one borrows at a 20% interest rate.
More broadly, the latest NFCS data show that financial knowledge, as measured by a set of five questions that have been kept constant across waves, has not improved. If anything, it has declined slightly since the 2009 survey. This is not very surprising: Without robust initiatives to boost financial knowledge, we are unlikely to see gains. To improve financial literacy, we need to step up the effort, starting with both schools and the workplace.
Similar findings emerged from the OECD PISA international assessment of financial literacy which shows that around one in seven students in the 13 OECD countries and economies that took part in the test were unable to make simple decisions about everyday spending, and only one in ten could solve complex financial tasks. The OECD/INFE International Survey of Adult Financial Literacy Competencies, released in October 2016 at the NZ-OECD Global Symposium on Financial Education, further shows that, on average across the 30 countries and economies covered in the survey, 20% of all respondents borrowed to make ends meet. In this respect, the OECD/INFE Core Competency Framework on Financial Literacy for Adults may help to address these issues as well as provide guidance to relevant stakeholders and policy makers.
The NFCS and OECD/INFE survey findings show that for businesses, policy makers, nonprofits, and others interested in advancing individuals’ financial capability, the need for new programmes, policies, and services is great—and the field for developing them is wide open.
Scholars are also positioned to take on a critical role. I vividly remember my work on the report for the first wave of the NFCS, which was jointly released on Dec. 15, 2009, by Treasury Secretary Timothy Geithner and Secretary of Education Arne Duncan in the Cash Room of the U.S. Treasury building. Someone said we were laying the first brick to construct policies and programmes to advance financial capability. Any time I work with these data I am reminded of that—and the important contribution that research can make.
 This study was commissioned by the FINRA Foundation in consultation with the U.S. Department of the Treasury and the President’s Advisory Council on Financial Literacy. It was launched in July 2016 at an event co-organised by the Global Financial Literacy Excellence Center (GFLEC) and the FINRA Investor Education Foundation. The roster of high-profile speakers at the event underscored the far-reaching interest in the results. Participants included FINRA President and CEO, Richard Ketchum; Securities and Exchange Commission Chair, Mary Joe White; the Director of the Consumer Financial Protection Bureau, Richard Cordray; the Deputy Secretary of the Department of the Treasury, Sara Bloom Raskin; and Canada’s Financial Literacy Leader, Jane Rooney.
In preparation for the 2015 Global Forum on Development, which will focus on how access to financing can contribute to inclusive social and economic development, the OECD Development Centre and the United Nations Capital Development Fund (UNCDF) have developed a series of articles exploring the key issues and dimensions of financial inclusion. Today’s post from Sarah Bel of the UNCDF Better Than Cash Alliance and James Eberlein of the OECD Development Centre highlights some of the overarching themes related to financial literacy.
“Most of our problems are based on finances. Money is always an issue. I have to still provide for both my parents who are not working and make sure they are fed; I must pay their insurance policies because they no longer have the ability to pay them. I don’t earn enough money to afford all of that.” – A 35-year-old man from Lesotho, interviewed as part of the UNCDF Making Access Possible initiative
Have you ever tested your financial literacy? Read what follows and you’ll get a better sense of why this matters more than you may have thought.
Low-income consumers must make complex financial decisions even more frequently than middle or high-income consumers, given their smaller operating margins and their limited and irregular incomes. A forthcoming report by UNCDF on Lesotho and Swaziland shows that many workers forfeit up to 40% of their income because of burdensome loan repayments. Indebtedness in the informal consumer market is often an indicator not only of poverty, but also limited financial literacy.
Yet these problems are not limited to poor consumers or low-income countries. While households in advanced and emerging economies have gained increased access to a wide range of financial products, they seldom have the capacity to fully understand and master them. In response to the growing concerns about over-indebtedness, policymakers across the world are focusing on “predatory” lending, which takes advantage of financial illiteracy to push inappropriate loans to consumers who cannot repay them. Some common-sense reforms, like those implemented in France, now require lenders to include a disclaimer (“You are responsible for paying back a loan. Verify your ability to repay the loan before borrowing.”) Additionally, all marketing material must include plain-language explanations of the long-term cost of loans (interest rate, total amount due and the final cost of the credit). South Africa’s Broad-Based Black Economic Empowerment (BBBEE) legislation has specific regulations around financial education and consumer empowerment as stipulated under the Financial Sector Codes. The purpose of these types of regulations is to improve financial capability and increase financial inclusion. But while such reforms have helped improve the protection of financial consumers, they only address part of the problem.
Many people, in developed and developing countries alike, know little about basic financial concepts and do not engage in savvy financial behaviours. An OECD paper shows that in almost all of the 14 countries across 4 continents taking part in the study, at least half of the adult population failed to identify the impact of interest compounding on their savings, and revealed that fewer than one in five people would shop around when buying financial products.
Unfortunately, the picture isn’t any brighter when it comes to young consumers. The recently published OECD PISA financial literacy assessment revealed that around one in seven students in the 13 OECD countries and economies taking part in the assessment are unable to make simple decisions about everyday spending, and only one in ten can solve complex financial tasks. This result is astonishing and requires prompt action to ensure that tomorrow’s adults understand bank statements, the long-term costs of consumer credit and how insurance works, among other basic financial services and products. Indeed, improving the financial literacy of young people will help ensure that they can benefit from savings, retirement and healthcare coverage — much-needed safety nets in the absence of parents and/or social systems. And in case you wonder if you’re any better off than a 15-year-old when it comes to financial literacy, have a look at these sample questions.
To help governments design and implement policies to increase financial skills, including among young people, the OECD and its International Network on Financial Education (INFE) developed High-level Principles on National Strategies for Financial Education, which were endorsed by G20 leaders in 2012. They encourage countries to develop nationally co-ordinated frameworks for financial education policies and provide general guidance on the main elements of an efficient national financial education strategy, such as an effective mechanism to co-ordinate with civil society and the private sector.
Governments may involve financial service providers and other key stakeholders to build the financial capabilities of young people and adults through a variety of delivery channels. Rwanda’s national strategy, for instance, underlines the importance of using not only schools to deliver financial education, but also other innovative channels to reach vulnerable, out-of-school youth. Umutanguha Finance, one of the ten institutions supported by the UNCDF initiative YouthStart, empowers teenagers to deliver financial education on issues like savings to younger children. This peer-to-peer approach is particularly useful because young people tend to listen to their peers more than adults, and the participative approach helps foster youth as agents of change in their own communities.
Financial literacy programmes can play an important role in reducing economic inequalities as well as empowering citizens and decreasing information asymmetries between financial intermediaries and their customers. Public authorities have a responsibility to develop financial education policies and set up robust financial consumer protection frameworks to ensure that consumers are informed and understand the financial products available to them. Innovations such as electronic payments are tipping the economic scales in favour of those who have, for too long, been excluded from the system. But unless consumers are equipped to make sound decisions about use of financial services, no amount of innovation will bridge the gap.
You’d expect stakeholders in a highly-competitive, high-profit, high-risk, globalised industry to have a clear financial vision, but when the heroes of Irving Welsh’s Trainspotting are discussing what they’d do with the expected profits from a drug deal, only Spud seems to have thought it through. But although “Buy somethin’ for my Ma ” is a lovely reply, it suggests that young Murphy lacks the Financial Literacy Skills for the 21st Century.
If you think you’re smarter than the average 15 year-old, try the test they sat as part of the latest PISA round. Nearly 30,000 students in 18 OECD and other countries took the test, representing around nine million 15-year-olds. The survey was carried out because “Shrinking welfare systems, shifting demographics, and the increased sophistication and expansion of financial services have all contributed to a greater awareness of the importance of ensuring that citizens and consumers of all ages are financially literate.”
The idea was to assess “knowledge and understanding of financial concepts and risks, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve the financial well-being of individuals and society, and to enable participation in economic life”.
Of course the 15 year-olds taking the tests are already participating in economic life as consumers and (in far smaller numbers) as savers. Many of them already have a bank card, and some cards are aimed at children as young as 8. This Indian bank shows a complex mixture of nationalism, naivety and opportunism on its website, claiming that: “We strongly believe that Indian kids are the smartest in the world and will use their hard earned savings in the best possible manner.”
Indian students took part in the PISA 2012 tests, but not on financial literacy, which may help explain why the top performers in the results published today are from China. Students from Shanghai score the highest in financial literacy, on average, with a mean score of 603 points, 103 points above the OECD average. There are wide differences in average performance between the highest- and lowest-performing countries and economies: more than 75 points (a full PISA proficiency level) among OECD countries and economies, and more than 225 points across all participants.
Only one in ten students in the OECD area scores at the highest financial literacy proficiency level – Level 5. That means they can solve non-routine financial problems such as calculating the balance on a bank statement, taking into account such factors as transfer fees, and understand the wider financial landscape, including the implications of income-tax brackets.
At the other end of the scale, 15% of students, on average, score below the baseline level of performance. In describing these results, the report makes what looks like one of the most radical claims you’ll ever see in an OECD publication: “At best, these students can recognise the difference between needs and wants.” In my opinion, if we could all do that, whole sections of the economy would collapse. In fact some companies have business models based on trying to convince people with thinking difficulties that there’s no difference between the two.
What Financial Literacy Skills means though is that these students can “make simple decisions about everyday spending, recognise the purpose of common financial documents, such as an invoice, and apply single and basic numerical operations (addition, subtraction or multiplication) in contexts that they are likely to have encountered personally.”
Given that being able to count and read is important for understanding bank statements, bills and so on, it may come as a surprise that high proficiency in mathematics and reading does not necessarily signal high performance in financial literacy. Students in some countries score higher in financial literacy than their performance in mathematics and reading would predict, while students in other countries perform worse in financial literacy than you’d predict from their performance in mathematics and reading.
And while PISA has consistently shown a gender gap in mathematics and reading performance, no such difference is observed between boys’ and girls’ average scores in financial literacy in 17 out of the 18 countries and economies that took part in the survey.
Family background is important though. A “more socio-economically advantaged” student scores 41 points higher in financial literacy – the equivalent of more than half a proficiency level – than a less-advantaged student. In Shanghai, family wealth is more strongly associated with financial literacy than with mathematics performance. In Israel, New Zealand, Shanghai and Spain, family wealth is more strongly related to financial literacy than to reading performance.
You can find full details here about PISA Volume VI and the other V volumes (Fibonacci may have introduced Hindu-Arabic numerals to facilitate double-entry bookkeeping at the start of the 13th century, but we’ll stick to Roman for financial literacy in the 21st).
What do teens know about money? By Andreas Schleicher, Director for Education and Skills on the educationtoday blog
What’s the most depressing book you’ve ever read? I sniggered at Jude the Obscure until I got bored, and I felt that the eponymous little twerp in The Sorrows of Young Werther was lucky his girlfriend didn’t blow his brains out for him. So imagine my surprise to find a book published by the OECD of all people that touched me deeply. Improving Financial Education and Awareness on Insurance and Private Pensions gave me a stark, uncompromising insight into the error of my ways.
Page after page describes all the stupid things people do when buying insurance or planning for retirement. Like all great literature, you can hear the author’s voice as you read. In this case, I’m sure they were two, and you could hear one saying “We’ve got to be thorough, cover all the possible cases” and the other replying “Come on, nobody’s that stupid!” He was wrong. I kept thinking: “That’s me! So is that! Oh no, that’s me too”. By the time I’d finished, I was in shock, but like the hand bursting from the grave at the end of a horror film, there was worse to come.
Once they’d finished listing all the daft things you shouldn’t do, the next stage of the descent into hell described all the clever things you should do. Not once did I cry out in relief “Yes, I did that”. No, I found myself muttering: “What’s that? Never heard of it. What are they talking about?”
So, apart from me, who else has a problem? Most of us, according to a joint report by the G20 Russian Presidency and the OECD that’s just been released following last week’s summit in St Petersburg. This time, it’s the report’s authors who are worried, because of: “… the long-term implications [in a growing number of countries] of low levels of financial literacy among the majority of the population.”
Women are particularly affected, and even though they appear to be better than men at keeping track of their finances, this short brochure produced by the OECD Directorate for Financial Affairs shows why there’s reason to be worried. For example, almost 60% of women in Poland don’t know that high investment returns are accompanied by high risk (45% of men don’t know either).
Women earn 16% less than men on average in OECD countries and spend more time outside formal employment and the social protection schemes linked to having a job. That helps explain why they tend to save less than men, especially for retirement, have more trouble making ends meet, and face a higher risk of poverty in old age. When choosing financial products, women are less likely than men to shop around, or to use independent advisors.
The G20 report identifies youth as another priority, and there’s also a brochure about financial education in schools. Again, there are some worrying statistics, for instance three-quarters of young Danes have little or no knowledge about interest rates. (I’m not sure what to make of the 96% of teenagers in the UK “who say they worry about money on a daily basis”. Maybe they could be financially educated to understand they can’t get everything they want.) The OECD recommends starting young and building financial literacy into school curricula from an early age. This is all the more important given that in many cases their parents or carers may not know much about finance themselves, and in some cases may even be worse than useless because of the bad example they give.
Last week’s G20 also heard from the G20/OECD task force about implementing the G20 “High-level Principles on financial consumer protection” endorsed in 2011. High-level here refers to the fact that the principles are not all that detailed, such as this one: “Strong and effective legal and judicial or supervisory mechanisms should exist to protect consumers from and sanction against financial frauds, abuses and errors.” As you can imagine, actually translating that into effective practice in different national contexts takes time, and the latest report is the ninth draft.
We’ll bring you up to date on progress as it happens. In the meantime, I should point out that the book I mentioned at the start wasn’t totally depressing. In fact, just when all hope had gone, I realised I wasn’t alone in my despair. Here’s what restored my faith in human nature: “A survey by the Royal Bank of Canada finds that respondents consider choosing the right investments for a retirement savings plan to be more stressful than going to the dentist.” I love Canadians.
Today’s post is contributed by Chiara Monticone and Flore-Anne Messy of the OECD’s Financial Affairs Division
International Women’s Day traditionally attracts media attention to differences between men and women, such as the number of women on company boards, income gaps, and so on. However, awareness of gender differences in financial literacy and of their potential implications has remained quite low even though policy makers now recognise financial literacy as an essential life-skill, and financial education has become an important policy priority as a complement to financial consumer protection, inclusion and prudential regulation. The G20 Mexican Presidency for example has called on the OECD to develop High Level Principles on National Strategy for Financial Education that are expected to be approved by G20 leaders in June 2012.
A new working paper from the OECD’s Financial Affairs Division, Empowering Women through Financial Awareness and Education, reveals that women perform worse than men on tests of financial knowledge on average. For instance, in the US, while 60-70% of men can correctly answer questions about calculating interest or about inflation and risk diversification, only 50-60% of women can do so.
Moreover, women tend to be less confident about their financial skills than men in several domains. For instance, a study conducted in Australia reveals that women are generally as confident as men in their ability with everyday money management, including budgeting, saving, dealing with credit and managing debt, but that they are less confident than men when it comes to more complex issues like investing, understanding financial language and planning for retirement.
Evidence on vulnerable sub-populations suggests that women at either end of the age spectrum, low-income women, and widows may be more vulnerable to the negative consequences of low levels of financial literacy than other women, or men in the same subgroups.
This is worrying because lower levels of financial literacy can reduce women’s active participation within the economy, as well as effective personal and household financial management. Greater financial literacy could enable women to be better equipped to access and choose appropriate financial services , as well as to develop and manage entrepreneurial activities. Moreover, as women tend both to live longer and earn less than men, they are more likely to face poverty or financial hardship later in life.
All this is amplified by the fact that public policies in many countries have shifted a range of financial risks and related decisions to individual consumers. In addition, women’s lower financial literacy can reduce their economic power within the household, and the transmission of knowledge to the next generation.
A survey of authorities in developed and emerging economies reveals that some of them – including Australia, India, Lebanon, New Zealand, Poland, Turkey, the UK and the US – acknowledge the need to address the financial literacy of women and girls, and have implemented financial education programmes targeting them.
However, there is scope for improvement. Gender differences in financial literacy and behaviour should be explored further, to gain a deeper understanding of the specific aspects of financial literacy that might negatively affect the financial wellbeing of women, and design better targeted policy interventions. For instance, more needs to be learnt about why women’s levels of financial literacy are lower than men’s.
The OECD International Network on Financial Education (INFE) is working to address these issues by collecting and analysing internationally comparable data using the OECD/INFE Financial Literacy Core Questionnaire for adults and the 2012 PISA Financial Literacy international option for 15 year olds; identifying and comparing effective financial education programmes; and developing high-level policy analysis.
8 March is the centenary of International Women’s Day. This year, we mark the occasion with a series of blog posts about initiatives to strengthen gender equality worldwide. In this post, Flore-Anne Messy of the OECD’s Directorate for Financial and Enterprise Affairs discusses women and financial education.
Elderly women in OECD countries are 30% more likely than men to be poor. Women receive $75,000 dollars less pension on average over their lifetime than men, despite living 5.6 years longer. But whatever their age, poverty rates for women in OECD countries are higher than for men.
It’s not just that women generally earn less than men. Where money is concerned, there are also big gender differences in knowledge and skills. Research in the US and other countries shows that women are less likely than men to give the correct answer to financial knowledge questions. They are also more likely to lack confidence in their own skills, be cautious investors, and to have insufficient funds for retirement. This cautious approach does have advantages but can severely impact on retirement funds. Studies in the US suggest that women’s retirement pots are, on average, a third smaller than men’s. (more…)