Women & money: financial independence on your terms

To celebrate International Women’s Day, we’re shining a light on financial independence - and what it really means. Financial independence is often misunderstood. It can sound like never needing anyone, being entirely self-sufficient, or having so much money you never have to worry again.

But for most women, financial independence is something much more practical and far more powerful. It’s about choice, safety and resilience.

It’s the ability to make decisions without feeling financially trapped. It’s about having a buffer when something unexpected happens. It’s being able to adapt when life changes - because life often throws us curveballs.

And on that note, it’s worth acknowledging that financial independence doesn’t look the same for everyone. It shifts across life stages, relationships and careers.

What matters is building financial independence on your terms - whether you’re married, single, divorced, widowed, a carer (for the young or old) or dealing with health issues….

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Why this matters now

First, some good news. Fidelity research¹ shows that over half of women in the UK feel optimistic about the future - among the highest levels recorded since the Global Sentiment Survey began five years ago.

But, when it comes to finances, confidence tells a different story.

While many women feel reasonably confident in their ability to manage their day-to-day finances, only one in five feel confident about saving enough for retirement.

At the same time, financial stress is real. Two in five working women say they have often felt worried in the past six months, and a third report often feeling overwhelmed. The biggest financial stressors include saving enough for retirement, meeting long-term financial goals, covering immediate financial needs and paying down debt.

The gap between optimism and long-term confidence tells us something important - financial independence isn’t just about income, it’s about clarity.

Women who know their numbers - such as how much income they may need in retirement - are significantly more likely to feel confident about achieving long-term security.

There’s something about clarity and facing up to your finances that may help build confidence. And this is something you can tackle step by step.

How to start building financial independence

Financial independence begins with having money in your own name. A helpful way to think about your money is in three buckets: emergency savings; medium and longer-term financial goals and retirement (pensions). Let’s look at each in turn.

1. Emergency fund

An emergency fund is your safety net. It’s there for job loss, a boiler breaking, a sudden large bill or perhaps even a relationship change.

A sensible target is three to six months’ worth of essential expenses held in cash in an easily accessible account.

According to our Global Sentiment Survey, most women already have some savings. The median household savings reported by women in the UK is £7,500, and only 8% report having no cash savings at all. Despite this, only a third feel confident in their ability to save for an emergency.

This suggests the issue isn’t always the absence of savings - it can be visibility and ownership. Knowing what you have, where it is, and how quickly you can access it can act as a powerful psychological safety net. Even a modest buffer can help reduce financial anxiety.

2. Medium and longer-term financial goals

Once your safety net is in place, the next step is saving for any financial goals you might have - such as moving home, travel, retraining, starting a business - or simply building flexibility into your future.

ISAs (Individual Savings Accounts) allow you to save and invest tax efficiently. For goals within five years, cash ISAs can provide short-term stability. For longer time horizons of five years or more, investment ISAs may offer greater growth potential but the aren’t risk-free.

That’s why it’s important to understand the role of cash versus investing.

Cash is secure but limited in terms of long-term growth. Invested money can rise and fall in value but, over time, has the potential to deliver higher returns than cash savings.

But the sooner you start investing, the longer your money has to potentially grow. Starting early can make a meaningful difference.

3. Retirement and your pension

Retirement can feel abstract when it’s years down the line. It becomes infinitely more real the closer you get to it. Our research shows that confidence drops when it comes to saving for later life, with only one in five women feeling confident in their ability to save for retirement.

Motherhood, career breaks, part-time work and caring responsibilities disproportionately affect women’s earnings and pension accumulation. 75.1% of part-time workers are women²; mothers lose around £65,000 in earnings within five years³ of their first child and that parenthood can create a lifetime pension penalty of £92,000 - £183,000⁴.

Financial independence means actively protecting your pension - especially after career pauses or life changes.

Even small increases can have large long-term effects. Let’s see what this looks like using our power of small amounts calculator. For example, take a 30-year-old who is earning £40,000. By increasing their pension contributions by just 1%, they could add approximately £73,600 to their retirement pot by age 68. That’s an investment of less than £8 per week.

• Use our power of small amounts tool to see what this could mean to you >

And if you’re not working, you can still contribute up to £2,880 each tax year and receive tax relief to make a total of £3,600. A partner can also contribute on your behalf. A personal pension can also be used alongside a workplace scheme to consolidate old pensions or top up your retirement savings beyond your employer plan.

Your financial independence checklist

You don’t need to predict the future or have a perfect plan. Financial independence is about being ready for change, at whatever age or stage it arrives. You don’t have to have it all figured out, you just need to start. Here are some simple steps to guide you.

1. Build or review your emergency fund. Aim for three to six months of essential expenses in an easy-access account in your own name. Revisit the amount regularly and adjust it after major life events such as moving home, changing jobs or starting a family.

2. Know your numbers. Locate all workplace and personal pensions and check your balances, contribution levels and investment choices. Review fees, ensure beneficiary nominations are up to date and understand roughly what income your savings might provide in retirement.

3. Save for medium-term goals tax-efficiently. Use cash ISAs for shorter-term objectives and consider investment ISAs for goals five years or more away. Make sure your approach matches your timeframe and your comfort with risk.

4. Strengthen your pension contributions. Increase contributions after pay rises, when returning from maternity leave or once debts are cleared. Make full use of any employer matching in your workplace scheme and consider opening or reviewing a personal pension if you are self-employed, part-time or taking a career break. If one partner is not working, explore whether spousal contributions could help maintain retirement savings momentum.

5. Protect what you are building. Review income protection, life cover and critical illness policies. Ensure your will is up to date, check pension beneficiary nominations and consider putting a power of attorney in place so decisions can be made if you are unable to make them yourself.

6. Understand your workplace benefits. Take time to review what your employer offers, from pension matching and protection cover to financial wellbeing tools and guidance. Many women are unsure what support is available, which means valuable benefits may be going unused.

7. Consider professional advice. If you have over £100k invested with us (including your pension) and your finances feel complex or you want reassurance that you’re on track, you might like to think about getting financial advice. Our advisers can help you build a clear, tailored plan for investing, retirement and long-term goals - giving you greater confidence in the decisions you make. Learn more about financial advice.

Got a burning question you want to ask? Why not drop us a line. Click here to ask your question.

• Read: How to fix the UK’s 37% pension gap
• Read: How long could it take me to save £20k, £50k or £100k?
• Watch: These are the money lessons to teach your children

Sources:

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.