To say that every woman on MN should read this article

[itsgoodtobehome]

In this week's Grazia - 'Why women need to wise up to the pension penalty'. It is really quite shocking, and I read so many threads on here about women who stop working when they have children, and I think especially if you are not married, you really need to read this.

A couple of things that jumped out at me:

'it will cost you about £25,000 in retirement savings to take year-long maternity leaves for two children in your early thirties if you earn the average UK salary (£30,000) and stop paying into your company scheme while you are off. This rises to a £47k hit if you go back to work part-time until your children are at school'

Also:
'If you aren't married, you are not automatically entitled to any of your partner's pension savings if you split up or he dies.'

It's not something we always think about in our younger years, but make sure you protect yourselves ladies, especially if you have children but are not married.

Omg. I wrote about this on here not long ago. They stole my story!

Really? Laura Whateley wrote the article.

Why do you lose out on so much for one year?!

@BlakcPrism - because you aren't contributing to your pension and those missing contributions aren't subsequently invested

blackprism because of compound interest money put away early in your career makes more of a difference.

So two years without contributions in your early 30s costs a lot more than two years in your 60s

Yes, women need to read this!

Agree- a frightening proportion of women are inadequately prepared financially for their older age. I’m aware my own pension took a hit when I worked part time while my children were tiny (though i only too very short ML as this was 20+ years ago)
Best thing I ever did was step back up to full time work when my youngest turned 4. I see so many women my age (50s) who’ve remained part time forever after having kids and they’re realising now what a devastating impact it’s had on their pension

Ashamed to admit that I have no pension. Sahm. I am married though.

My employer continues to pay benefits like pension contributions when you're on maternity leave, I'd assumed this was common - is it not?

I'm part-time.
I'd rather get used to living with less than go back full-time!

Why do people stop paying into pension during maternity? Mine automatically carried on. Also, my employer carried on paying their percentage in as usual

Women cannot win.

I have a small baby and am now on maternity leave. This is the reality. It’s not equal

I'm part-time.
I'd rather get used to living with less than go back full-time!

It's all very well to say that, but do you know how much pension you will receive? The state pension is currently only £168 per week, and you only get that if you have at least 35 years of national insurance contributions. I don't think people realise how little you actually get if you are not adequately prepared.

MonkeyTrap - no it's definitely not equal. That is the whole point of the article.

Yes, as explained upthread, the problem is that, due to compound interest, money invested in your 30s is worth a lot more than money in your 60s.

I get full pay for 6 months of mat leave, and I'm only taking 6 months, so my pension is unaffected. But this is certainly worth bearing in mind for women who don't get pension while they're away, or who choose to stay at home while unmarried (if married, pensions are addressed during divorce).

My understanding is that pension contributions continue during ML, though I’m not entirely sure... particularly nowadays when a lot of women take extended ML up to a year.

The bigger issue is if women stop working or work only part time for a significant length of time though. Your pension will reduce a lot.

Being married to someone with a decent pension helps, but remember if they die first, you’ll only get the spouse pension which is likely to be a lot less than the full pension. Which is why it’s so important women have their own pension provision

Ashamed to admit that I have no pension. Sahm. I am married though

What will you live on in retirement though? Especially if your DH passes away before you? No-one should rely on their spouse's pension or the state to provide for them in retirement.

I’ve begun to realise quite how unequal it is. I’m on mat leave and facing the dilemma of whether or not I go back to work. However you look at it you can’t win!

TeuchterTraveller My MIL doesn't have her own pension and when my FIL spent time in a care home, he had half of his pension taken to pay for it. She was very broke and still had bills to pay.

The state pension is currently only £168 per week, and you only get that if you have at least 35 years of national insurance contributions.

But will there be a state pension in 20 or 30 years? My MIL is getting a pension having worked around 5 years in her life, most of that part-time...

Also confused by this as my pension contributions continue as normal during my may leave. I haven’t missed out on anything that I know of.

I will soon because I’ll be going back part time or not at all but I’m aware of the consequences of that.. just not the maternity leave point.

On the flip side all those students miss 3 years of pension contributions in their early twenties...
Im not trying to minimise the issue though. Financial planning is incredibly important and factoring in pension contributions when you take mat leave or work part time is also important but its so hard to know what to do sometimes and how to plan.

and many posters are so violent against buy-to-let landlords and so on. It's so risky to relay only a pension and have nowhere enough to survive, what's wrong with building a safety nest.

@Grasspigeons

On the flip side all those students miss 3 years of pension contributions in their early twenties...

Why? I've been paying into my pension since 16, why would that stop when i went to uni? I was still working, as were most people i knew

If you earn more as a result of studying for 3 years then you’ll be making higher pension contributions and therefore more likely to have a better pension. Also many students are working and paying pension contributions while at uni

Lazypuppy - thats good to hear. When i was of uni age (didnt go) most employers didnt offer pensions to summer students or pt workers. In fact many jobs like retail or hospitality didnt have pensions with them at all. So students in my day would have had to set up their own provate pension and no one i knew did. It was pre stakeholder pensions The law changed a year or so after my cohort left so hopefully it is more normsl now. Even my first office jobs didnt have pensions as part of them.