Five things women in their 50s need to know about money 

Written by
Rebecca Goodman
Insurance expert
23 February 2022
5 min read
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Turning 50 is a time for celebration. You’ve made it to half a century and it’s well worth setting out a list of all the amazing achievements you’ve ticked off your bucket list so far. 

There’s no reason to slow down either, as there’s still a long way to go until retirement and even then, there’s nothing to say you need to stop working or doing all the things you currently do. 

It is worth drilling down on your finances though, as it is at any age, and focussing on your retirement pot, planning how your estate may be divided, and thinking about anyone you want to leave money to. 

You may also be planning a new bucket list, with that long-planned gap year to a country you’ve always dreamed of visiting. 

Here we look at five financial areas to focus on as you hit the big 5-0. 

The money in your pension pot is designed to last for your entire lifetime 

You can claim your pension early, but should you? 

New Pension Freedom rules mean you’re now able to claim your pension early i.e. when you turn 55. 

You can do this if you’ve got a Defined Contribution or Money Purchase pension, and you could take the savings as a cash lump sum while you continue to work. 

Of the money, 25% is tax-free while the remaining 75% is taxed. If you’re debating accessing the cash early (while it’s your money and you’re free to do what you’d like with it) the decision is not one to take lightly. 

The money in your pension pot is designed to last for your entire lifetime, therefore accessing it early will make a significant dent to the amount available when you do retire. 

You’ll need to carefully plan out how much money you have left, if you do take it early, and how long this will last. 

Write a will 

If you’re yet to make a will, now is the time, and if you’ve got an old will you’ll need to update it. 

If you’re married or in a civil partnership, legally everything you own - also known as your estate - will go towards your partner if you die without a will. 

However, a court may decide what happens to any children you have, and you’ll have no say if you’d like the money to go to anyone else – for example, some people leave money to friends, other family members, or charities. 

Writing a will is a quick and easy way to secure what happens to your estate when you die. It can be done online, or you can visit a solicitor to have a will drawn up, for a cost. 

Over 50s life insurance 

If you have no life insurance policy in place, which may be the case if you have no financial dependents, and you’re worried about leaving money to loved ones, life insurance may be an option. 

There are specific policies for those aged over 50 which require no medical assessment. This means if you have any pre-existing conditions, for example, you don’t need to declare them and you are still be able to set up a policy. 

These are usually used for leaving a small amount to dependents, or for paying for funeral costs. 

Before you sign up, make sure you’ve read the details as some of these policies have a period before a claim can be made, and many won’t pay a penny if you’ve missed a monthly premium. 

If you die within seven years of gifting money away, inheritance tax will still apply 

Plan your gap year 

If you didn’t have a gap year when you were younger, or even if you did, there’s nothing stopping you from taking another one. 

Many people take a career break to go on a long-planned trip they’ve spent their lives dreaming of. It could be a road trip across America, a yoga retreat in Bali, or an art course in the south of France. 

Whatever the trip you’ve got planned, you’ll need to set aside money to pay for it. Both in advance and while you’re away. 

You will also need a travel insurance policy. Most standard policies have a limit on the number of days you’re allowed out of the country so you may need a specialist policy, and this will need to cover the countries you’re visiting, any activities you plan to do, and provide enough cover for anything you’re taking with you. 

Use Compare the Market’s  travel insurance comparison service to look at travel insurance policies available to you. 

Simply enter your details – including any pre-existing medical conditions you have – and in just a few minutes you’ll have a selection to choose from. 

When you declare medical conditions on our website, we’ll only show quotes from insurance providers who will cover all declared medical conditions, with no exclusions. 

Choosing the right kind of plastic to spend on can also make a big difference to your cash. Aim for a specialist credit or debit card without extra fees. You could also use a prepaid card which allows you to lock in an exchange rate in advance. 

Find some of the best cards for your needs  here

Avoid a hefty tax bill for your family members 

If you’re in the position whereby any money you would leave behind on death would exceed the inheritance tax (IHT) allowance threshold, which is currently £325,000, then it’s time to think about some estate planning. 

Anything left behind over this amount, if it doesn’t go to a spouse, will be charged at 40%. There are many legal ways to reduce any potential IHT bills for your family, including gifting money away. 

You can’t just start handing cash out though; there are rules to stick to. For example, you can give away £3,000 a year tax-free and gifts of £5,000 are allowed for children’s weddings. However, if you die within seven years of gifting money away, IHT will still apply. 

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Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.