A growing number of female teachers are grasping the finance nettle, writes Elaine Williams
A woman's life can be a financial nightmare. Career breaks, children, divorce, caring for elderly parents, increasing longevity: all can bring a variety of money complications. And a bewildering choice of financial products can make women feel that their financial future is out of control.
Although teachers have a poor reputation for financial initiative, a growing band of women teachers are trying to take matters in hand. Fiona Price Partners, a London-based firm of women-only independent financial advisers specialising in female clients, says the number of women teachers on its books is growing.
Jennifer Coates is not untypical. Now professor of linguistics at the Roehampton Institute, London, she has had a varied career that has taken in short-term secondary school teaching, three children, evening-class teaching, contract research posts, divorce, penury, full-time lecturing and a more comfortable middle age.
Although she is thrifty, Professor Coates admits that financial planning is something she should have looked at much earlier. She turned to Fiona Price Partners only 18 months ago because she wanted to be sure she was making the right provision for her old age.
"In the past," she says, "whenever I felt my finances were getting chaotic I would go down to my local bank. The first time I did this they signed me up for about five million things, some of which I am still trying to get out of. It was as if they knew it all and I didn't know anything. It never crossed my mind to find out what the alternatives were."
Although Professor Coates now earns Pounds 35,000 a year, she felt she needed to create a coherent strategy out of the various financial commitments and investments she had made over the years. She also wanted to invest money left to her by her mother. As an academic who has made it her business to study the way women and men talk, she sought out a women-only firm of advisers and was struck forcibly by the difference. "With this firm I felt we were talking the same language," she says. "When I said I couldn't make my mind up on things, I didn't feel daddy was going to be cross."
Professor Coates joined the Teachers' Superannuation Scheme late, aged 33. The bank had persuaded her to take out a flexible savings plan that matures in 2008. "It started off at Pounds 120 a month to rise by Pounds 12 a year until it reached Pounds 180. Taking my commitments as a whole, my adviser said that was too much and is trying to freeze it for me.
"I'd also taken out three added years on my pension on the advice of a male colleague, paying over 10 years. You pay out a proportion of your salary, which is value for money when you are earning very little, but on my present salary it's a huge amount. The bank also sold me an AVC (additional voluntary contribution), but above the legal limit. My accountant spotted that. They also persuaded me to take out unit trusts, but Fiona Price sold those on because they were costing too much and transferred the money into a PEP.
"At present I'm opening a PEP a year and looking for an ethical PEP for my Woolwich windfall. I've also started a TESSA, and my roof-falling-off deposit account has been transferred to another bank with a better rate of interest.
"As things stand I think I'll be able to retire on Pounds 12,000 a year, which seems amazing to me as I'm very good at making ends meet. That's never been a problem. I've made some irresponsible financial decisions in the past, but I feel more in control now."
Hilary Belden, aged 50, recently became head at Glenthorne High School, London, a 1,000-pupil, mixed 11-18 comprehensive in Sutton. She has 27 years of unbroken service in teaching and is unmarried, with no children.
Although she has no real financial worries (her house is paid for), she wanted to provide for her parents and live well in her own old age. So she sought independent financial advice. "I wanted to be sure I was making every provision I could as there would be no partner to lean on," she says.
Although Miss Belden had taken out an AVC, and had savings with the Woolwich and Commercial Union, she did not feel in control. She says: "My adviser made a client profile and worked out how I wanted to use my money. I wanted to support good causes and my local church. We felt some of my savings payments could be made to work better and more ethically."
She immediately gained a better deal on her household insurance and cut down payments to the AVC. Because she has reached the limit on her pension saving, she is being advised to put money into TESSAs and PEPs, and feels secure that better decisions have been made. "We can go on 30 or 40 years after retirement. We have to be sure of our financial independence."
Split decisions on pensions by 2000
The legal right to claim a share of an ex-husband's pension is in sight for divorced women. Fewer women than men have their own pension schemes, and many who divorce face poverty in old age.
Pension-splitting arrangements will be in force by April 2000, and a draft Bill on pension-sharing will be published for consultation in this session of Parliament.
Although it has always been the case that a solicitor could assess the value of a partner's pension entitlement in making a clean-break settlement, under the new rules a woman will be entitled to up to a half of her former spouse's pension fund at the time of divorce to invest in her own pension plan and provide her with an income in retirement. However, putting a value on an individual's pension benefits could be difficult, especially in the case of a final-salary company scheme.