Childfree women in midlife (aka Queenagers) are wealthy, educated, independent and looking to the future. How do we leave a legacy that reflects our passions? And how do we plan financially to make our dreams a reality? As part of our partnership with our sponsor AJ Bell, – a Which? recommended provider for 2024-25 – we provide childfree financial advice and tips for your needs right now.
Studies show the more educated women are, the less likely we are to have children. Women baby boomers with degrees, born in the 1960s, are twice as likely to be childfree as non-graduates. These women with degrees earn more – benefiting from the so-called “graduate premium”. Too often these women (and they are a huge group, around 25% of ABC1 women aged 45-60 in the UK are childfree) are ignored by society or made to feel like outliers, when they are nothing of the kind.
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Here at NOON we are normalising the conversation around childfree women and their needs.
They are not an anomaly, they are a quarter of the Gen X population.
And when it comes to money, childfree women have different priorities than the rest of the population.
Many want to leave a legacy, and they see their 50s as a crucial time for making that happen, whether through purpose-led projects or other creative endeavours. They want their hard-earned money to work hard for them to help them fulfil their legacy dreams.
When it comes to finance, childfree women are at an advantage. The average cost of raising a child to adulthood is a little north of £223,000 according to research by MoneyFarm (and that’s before any swanky extras such as holidays or private schools where that sum can quickly become £1 million). Women who have kids also take a hit to their pay packet. Work by the Social Market Foundation shows that having a baby means missing out on almost £70,000 in wages on average, over the following decade, while the UK’s patchy, expensive childcare provision can easily cost as much as a second mortgage and leads to reduced earnings (taking time off to save on the nanny),stalled wage growth and limited career progression. And that’s before we even come to the ever-broadening pensions gap such stalled working lives often entail.
Childfree women in midlife: great position, but often overlooked
Without so many of these crippling financial liabilities the one in four women aged 45-60 who are childfree (that percentage can rise to nearly 30 per cent amongst women of this age who are university educated) are sitting on a goldmine. (Maybe that is one of the reasons why 40% of these childfree women, according to research by noon.org.uk, actively chose not to be mothers).
It’s not just that midlife childfree women tend to be wealthier and have more spending power, they also – because of the way our society works – often feel invisible to brands. As one respondent to Noon’s Queenager research put it: “Basically I’m single. Am a partner in a law firm. Haven’t got kids. And so, yeah, I’m disposable-income-arama. But when it comes to brands, or being targeted it is as if I don’t exist.”
Another Queenager told us: “Financial services don’t speak to women, and they particularly tend to not speak to women without children so most of us feel very alienated, and we don’t know where to start.”
Karen Stenning realised in her late 30s when treatment for another condition plunged her into an early menopause that the children she had always dreamt of having weren’t going to materialise. So instead, she channelled all that energy into setting up Spirited Futures, a social enterprise providing a leadership academy for young change-makers who want to make a difference to the planet. “Of course coming to terms with being childless when you always expected them to be part of your life is hard,” she says. “But I’ve learnt you can do something really fantastic with the extra time and money… I’ve learnt to save money, travel, and now I am using my spare time and desire to pay it forward for the next generation to set up this charity to help future leaders.”
Stenning has also put much effort into putting her finances onto a sound, independent footing, after a relationship went south. Suddenly, on her own, in her early 40s, having been dependent on her ex for all accommodation and bills, she realised she had a poor money mindset, and she needed to take control.
“A man is not a financial plan”, she says
Stenning had to find a new job, a place to live, and build up her finances for the future. She realised the Government pension was going to be inadequate for her needs, and that she had to build up decent provision: “The Government pension is nothing. When I’m older it’s going to be pennies so reckoned I needed a good job. If you’re a single women, wake up, and work out what you want in the future.” Stenning did a lot of work, bought books and listened to podcasts. “I went into a big dive into all of it. I sorted out my own finances, secured my financial position. Now four years later on I have a flat of my own, my pension is doing well, by turning the full wattage of my skills and attention on to it, I turned it all around really quickly.”
Stenning says that although she recently lost some of her freelance work she can still go on holiday, and do the things she wants, and every month she pays a “decent amount” into her pension and ISA. She says: “I’m passionate about sustainability. I’ve learned that putting money into sustainable and ESG [funds that prioritise company policies towards environment, social and governance issues] have a big impact on the planet. I see that as part of my purpose and legacy and it is not hard to do.”
Hilary Mines, 55, is a child-free serial entrepreneur from Cheshire.
Hilary says that her lack of dependents has allowed her to take more risks, leading to better returns.
In her 30s she ran a successful wine bar, which she sold at the peak of the market and then founded a telecoms firm. Five years ago she sold that to manifest her dream: Trundl. This new company gets walkers – out exercising the dog or themselves – to raise money for different charities by clocking up the miles. It is an idea Mines has been incubating for over a decade. When she sold her last company she had a choice: put the money into property, or use it to fund Trundl without needing a bank loan or investor. “Because I don’t have children or other dependents – I was in a relationship for ten years but am single now – I was free to do the latter. I live extremely cheaply and work as much as I want so I can put my money into Trundl, which is my passion. My aim is for Trundl to be my lasting legacy. I could leave what I had to nephews, nieces and godchildren, I’ve got loads of young people whom I love in my life. But I decided to take a risk by backing myself and investing in Trundl. .. I reckon, if I fail I won’t get to my deathbed thinking I hadn’t tried. And it’s my money so it is there to fund my dream and purpose.”
Of course it’s not all legacy and purpose.
What childfree financial advice means to your lifestyle
Sam Secomb, a chartered financial planner at Women’s Wealth, warns: “Often these women have a lovely lifestyle and therefore need quite a lot of resources. Having learned how to spend, it can be hard for them to cut back and it is important to plan for the future.”
If you have a comfortable life and want it to continue into retirement then a well-funded financial plan is essential. Pensions are a great place to start, as money saved into them grows tax free, as well as benefitting from tax relief on contributions. If you are PAYE a company pension is particularly valuable as they are topped up by contributions from your employer as well as your own payments. ISAs are useful too, as any growth or income generated from them is tax free. The tax benefits are less attractive as contributions you make are out of taxed income (instead withdrawals are tax-free, where pensions are taxable). But ISAs are more flexible – you can access funds at any time, whereas with pensions you have to wait until you are 55, (rising to 57 in 2028).
Remember that pensions and ISAs are merely tax-beneficial savings vehicles. You will need to decide what to put in them – probably a mix of funds, government bonds and cash. Exactly what you select will depend on the level of risk you are prepared to take and how long you feel able to invest for. If the period you can keep the money in the vehicle is less than five years, it’s probably best to stick with keeping your cash in the bank. To help you decide what to buy – the so-called “asset allocation”— go online and do some reading. Remember to pay attention to costs, as funds with high charges eat into returns.
To give a very rough idea of how much income you’ll need in the future, a single 65 year-old can currently buy an annuity income of £7,385 a year with £100,000 of pension savings according to Sharing Pensions. (An annuity is a type of insurance product which purchases you an income, normally for the rest of your life. Other types of pension income are also available.) (Get step-by-step advice on finding out where your pensions stand.)
Stenning used an online pensions calculator to work out how much she’d need to save in order to go on travelling abroad and doing the yoga classes she loves as she gets older. She’s passionate about single independent women empowering themselves, by getting educated about their money, where in the past we’ve sat back and let someone else, often a man, take care of matters. “You don’t have to sit down and read loads of books. You can read a few articles and understand the basics. If you know what you want for the future you can quickly turn things around.”
If your affairs are complex or you don’t have the time or energy to do it yourself it is a good idea to consult an independent financial adviser (IFA).
Once you have created a pensions and ISA pot, or are on the way to building one, what about giving others a leg up? Charitable contributions attract tax relief, at your higher marginal income tax rate, if you make a Gift Aid declaration. The higher the rate of tax you pay, the more tax the Government gives you back. Or consider giving your time through charity, mentoring or business angel schemes.
Sarah Roughsedge, director/financial planner at Eva Wealth, says women with children often forego spending in retirement because they want to gift money instead to kids. Childfree women are more focussed on planning for their lifetime, ensuring their dreams and goals are met. Secomb says female entrepreneurs are less interested in building up wealth to pass on to the next generation, and are more prepared to take risks in the here and now; many aim to build a legacy in the company or enterprise they establish.
What happens if you get ill?
Two thirds of ABC1 women aged 45-60 are in a relationship, while a third are on their own. In the absence of a partner, some women, particularly those without children, are concerned about what would happen if they get sick and need time off work. Private health insurance can help you jump NHS queues, but prices rise with age, and insurers often exclude pre-existing conditions – medical conditions you developed before taking out the cover. You may have income protection insurance through your work, which can be a valuable benefit. Individual cover is also available for you to buy yourself, but be aware policies that have exclusions people have fallen foul of in the past. Critical illness insurance covers you in case you get a diagnosis of a dreaded disease. Individuals may have some life insurance through work. Taking out further cover might be less important if you don’t have dependents – often people take out life insurance to cover the mortgage should they die so their spouse and children can remain in the family home.
Looking further out, those who are single and childfree arguably need to make more comprehensive plans for care in old age. (Not that having children is any guarantee that they will look after you as you age!) From how you’ll change a lightbulb to what happens if you lose cognition if you are on your own, it is worth being prepared and unfortunately women are more likely than men to suffer from dementia and to live for a longer time. Care is fiendishly expensive. Care homes cost on average £800 a week, or £1,078 for a nursing home. Double, at least, in expensive areas of the country. There is a state-funded basic option but only once most other funds have been depleted, at the moment at least.
Roughsedge says although it’s hard to know whether you will need care, and the costs involved, people should model out what full provision might look like, and examine whether they have the assets to pay for it.
Don’t forget about Lasting Power of Attorney
Also crucial and often forgotten is arranging a Lasting Power of Attorney (LPAs). These documents lay out who takes charge of you and your affairs if you lose capacity. If you have a partner the normal procedure is for each of you to have an LPA for the other, or for a child to do it. You can apply at: https://www.gov.uk/government/publications/make-a-lasting-power-of-attorney, or ask a solicitor or accountant to arrange it for you. Where there are no arrangements in place, the Government, in the shape of the Court of Protection, takes control and makes decisions for you.
LPAs come in 2 forms: health and welfare, and property and financial affairs. In the absence of a Health and Welfare LPA, medics and carers often work with someone’s kids. If there are no childrenthey won’t necessarily talk to anyone else unless there is an LPA in place. When there’s no property and financial affairs LPA your assets are effectively locked out of reach. Someone can apply to the Court of Protection to become your deputy, but it’s an involved process taking up to a year, so much better to sort this out in advance!
Secomb says she saw clients have trouble during the pandemic, because they hadn’t done a property and financial LPA; some lost tens of thousands of pounds when they were incapacitated due to Covid but Secomb was unable to adjust their investments to pre-empt losses as there wasn’t an LPA in place to give approval on their behalf.
Important childfree financial advice: Who’s your trusted person?
Victoria Green, senior associate in the trust and estates team at Ashfords LLP, recommends childfree people appoint as attorney someone else they trust implicitly, normally a younger person more likely to be in health, maybe a niece or nephew, godchild, or child of a friend. People do sometimes use a solicitor, though this route will be expensive and such attorneys may not know you well. Green recommends women write a “guide to you” – a crib sheet on how you like to lead your life, covering anything from dietary requirements, medical treatments you wish not to undergo, to whether you want to be cared for in your home.
One of the fascinating aspects of women who are childfree is the greater freedom they have to dispose of assets as they wish, and pass on a legacy.
Angela, 57, is married and a stepmother to three grown up children. But she has already decided that she is going to leave all of her money to cancer charities. “It’s not about not liking my stepchildren and not wanting to leave them money,” she explains. “Loving them is my job, and I do love them and as I have always been the major wage earner, I have been supporting them since they were very young. It’s more about me, and leaving my own legacy in the way that I want to. I wasn’t lucky enough to have had kids of my own… I never changed my name. I’m fiercely independent and always earned my own living and largely funded all of their lifestyles. My husband knows my plan and agrees that it is absolutely up to me where my money goes after I die. And I’ve decided to leave it to all my favourite charities.” And why not? As one of our Noon women put it: “It’s my damn money and I damn earnt it – I’ll spend it how I like”.
Whatever you want to happen after your death, the most important thing to do is to make a will, or the State will decide for you where your money should go. Secomb at Women’s Wealth reports that quite a few women she has advised are very concerned that their beloved dog or cat is properly provided for when they pass; if you want to do this make sure you speak to a lawyer about setting up a trust arrangement. Also, know that the inheritance tax regime (IHT) discriminates against unmarried people and those without children with lesser tax exemptions, so it may be worth taking some professional advice. For instance, you can reduce the IHT on your estate from 40 to 36 per cent, should you bequeath at least 10 per cent to charity.
Whatever you decide – make sure that that is what is going to happen by making a plan. It’s never too late and you are never too old to make a difference, or leave a legacy.
By Dido Sandler
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We are grateful to AJ Bell for partnering with Noon to focus on financial provision for women in midlife
