Family Commitments Vs. Your Pension – What Should Win?

A survey by Scottish Widows revealed that just 40% of women are not saving enough to live on in retirement. Shockingly, 37% of women have no pension at all. If the trend continues then many women will be facing retirement with inadequate savings.


The reason women aren’t saving enough for retirement is mainly due to family commitments. According to the survey, only 50% of women in their 30s work full-time and when women reach their 40s, they prioritise supporting their children above saving for retirement. By the time women reach 50 their focus is on paying off debt accrued in their 30s and 40s so again, they don’t prioritise their pension.

If you’re worried that your pension pot won’t be enough then you can make some small changes now to ensure you make the most of your pension.

Adapting to changing Jobs, part-time and full-time work

Being a mum and being adaptable go hand-in-hand so it could be that you work a number of short term jobs, part-time jobs or go straight back into full-time permanent work depending on your circumstances. Changing jobs can mean that you end up with a number of frozen pensions (personal or occupational pensions you’ve had in previous jobs) which will have cash in them which won’t be bringing in any kind of investment as they are ‘frozen’. You can contact the Government’s Pension Tracing Service here to trace any old pensions. Once you’ve tracked them down consider consolidating your different pensions and reinvesting your cash into a pension scheme which will work harder for you. If in doubt, speak to an independent financial advisor for advice.

If you’re pregnant and are planning to return to work at the same place after your maternity leave then, if you have paid maternity leave, it’s advisable to leave your pension as it is as you and your employer can still contribute during your maternity leave. If you’re lucky enough to be in a final salary pension scheme but are thinking of going part-time after having your baby, then consider what impact this will have on your benefits at retirement.

What if I’ve not worked for a while?

Returning to work after having a career break can be scary, so a pension might be the last thing on your mind as you get to grips with being part of the workforce again. It’s really important to think about your pension as soon as possible, as the stats above show, leaving it too late could cause major issues in retirement. The first thing to do is to speak to your HR department and find out if you are eligible to join the pension scheme in your new place of work (presuming it has one) and if you can join, find out where you should invest your regular payments. Finally, take stock of any old pensions you might have had in previous jobs (see above).

What if I have more than one job?

It’s common to have more than one job if you’re juggling your family commitments with your working life and often, multiple part-time jobs provide greater flexibility to work the hours you want. However, paying tax and sorting your pension out when you have a couple of jobs can be tricky. Check your tax code as the system is designed to treat one job as your main job (even if you work the same hours in two jobs) and your main job will be the one you receive your tax personal allowance on. You are allowed to pay in 100% of your earnings into a pension (up to a maximum of £50,000 this tax year) so if you are juggling a number of jobs then it might be worth considering paying all of the money you earn from one into a pension fund. You should also ask if you qualify for a pension from each of your jobs too. If you take on self-employed work as well, and earn extra cash from blogging or crafting for example, then making pension contributions is a good way to reduce your tax bill as you don’t pay tax on your pension.

What if I won’t have enough pension to retire on?

When you reach retirement age, the amount you’ll receive in your state pension is directly relevant to how much National Insurance (NI) you have paid. Although it might be years before you retire, bear in mind that the state pension is only currently £110.15 a week and the amount you’ll be entitled to will depend on what you’ve paid in, so it could be much less than this. Women will need 35 years of NI payments to qualify for a pension of £144 a week. If you’ve had time out of work to raise your family then you won’t have been contributing NI payments. This is also true if you’ve worked part-time after having children but haven’t earned enough to qualify for NI contributions. You can see how many years NI contributions you have paid by checking out your National Insurance Contributions record on the NI Direct website.


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