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.

I recently went back to work in a new sector after a short career break and at the bottom of the ladder again and I'm horrified at how many of my colleagues are opting out of their pensions because they would rather have the money now!

I have no pension, no job and a terminally ill Dp.

I doubt anyone would ever employ me.
No qualifications and riddled with arthritis.

Does it also say that you need to register for child benefit even if you aren't entitled to it so that your national insurance years are registered?! So many women have high salaried husbands so aren't eligible to claim child benefit but if you don't register those years you're doing child care and not working won't count towards your state pension. (You also need to register each child so they automatically receive a national insurance card when they're 16)

My pension carried in throughout maternity and surely it's common sense to realise pension implications if you stop working etc.

I had 35 years of contributions when I was 59so stopped working as I could afford to. I will get the full pension. Went to Uni and did not work every year but sometimes part time. When I was unemployed,I signed on and got my stamp that way.

By the co op

Wrong thread

This is such an important issue. Thank you for raising it OP.
I'm often shocked how oblivious some women on here when they talk about quitting work etc.
And I think it's not just the issue of retirement it's also the fact that they are leaving themselves completely financially vulnerable. When relationships breakdown is almost always the woman who is crippled with low income and high outgoings while the man goes off into the sunset without any impact on earnings.

I'm 33. I sincerely doubt there will be a state pension in 40 years when I'm 73 and the age of retirement has been bumped up that high. We're about to have a massive dip in 18yr olds and the workforce paying in to the coffers for a bloody long time and babyboomers living much longer totally draining it.

If there is one it will be means tested and I likely won't qualify as I will own my property and possibly substantial savings as we will be essentially mortgage free soon, until we ever decide to upsize or relocate. Plus small private pensions which would be deducted from the state allowance anyway 🙄

It's all a load of shite and I'd rather spend my money when I have it, rather than save it for a retirement that I'll likely never see 🤷

For anyone who has young children and is claiming universal credit, it's worth pointing out that UC payments don't count what you pay into your pension as income. So if you're part time and getting UC as a result, to top up, pay loads into your pension and UC will make up the difference. I know that doesn't apply to everyone but it may be helpful for those in that specific situation.

My entire life I’ve either been a student or in a crap job that barely paid enough to live on. I couldn’t afford to spare any money to invest in a pension otherwise I wouldn’t have had enough to pay my bills. And it wasn’t compulsory for either me or my employer to pay into one so we didn’t. The result is that I’m 40 with no pension. If I’m lucky I might fit in 20 more years of minimum contributions which I doubt will be worth much.

A pension is compulsory now but there are still MANY people who only pay the absolute minimum because their job pays very little and they can’t afford to spare more than that. And there are many older people in my situation with no past contributions because it’s only recently become compulsory.

I don’t know if I’ll get a state pension either. In terms of NI contributions I think I’ve got about ten years under my belt. I was at university for nine years so don’t have any contributions for that period. I’ll be lucky if I can fit in enough more years to get a state pension.

I'm not believing the 2 yrs of lost contributions = lost £25000. Or at least, I need to see that worked out very clearly on a spreadsheet.

Back of envelope... contrib = assume 8% of gross salary.
Assume gross salary = £30k
8% of £30k = £2400. That's £200 per month.
Who here on £30k has £200/month going into their pension?

£4800 growing at 2% per year, compound interest, 33 yrs later , becomes £9282. Not £25k.
Not sure how that calculator handles inflation.

@Peachsummer You can ask online for a summary of how many years you qualify for (not that it matters - like PP I’m assuming little to no state pension by the time I am old enough anyway). I was surprised at how many years I already had, some years I’d just worked odd weeks while at university and somehow that counted.

Would still like to understand the maternity point if it was explained in the article?

if you earn the average UK salary (£30,000)

Ha ha ha - not in my world!

Who here on £30k has £200/month going into their pension?

🙋‍♀️ plus £400 a month employer contribution

It isn’t looking at compound interest but at investment return over the long term, for which 4-5% isn’t unrealistic.

Did you also allow for tax relief?

Who here on £30k has £200/month going into their pension?

I'm on quite a bit more than that but including my employer's contribution I have about £1100 going into pension every month.

I have £250 - £300 going out my salary and the same from my employer (nhs) so about £500- £600 a month. I will be working until I'm 70 for it though.

I do understand mothers who take the hit to take time off when their children are very young. I don't understand the women on here who never really return to work and only ever work part time in minimum wage jobs.
Lots of claims that their children need them to be at home even during secondary and university. I find the posts where women suggest that having a little part time job is the norm, worrying both in terms of pension and equality.
There are so many women who blame the decision not to return to work ( after their children are at school) on their husbands. We all need to work and contribute financially if men are to be given the opportunity to become hands on fathers so that the parenting load is shared.
My mother, with five kids, worked full time until 65, part time until 70. Her GP told her that work is good and helped protect against mental health issues.

Check your state pension on gov.uk, it pulls up all your information and tells you what your pension is worth.

Its great IF you can go back ft and have a good job. I have kids with sn. I barely.hold onto my very pt job as no formal childcare will take children. My husband is paying into a private pension for me but not everyone has this luxury

Oh and the wonderful NHS wouldnt let me keep on making ft contributions to my pension while working pt - which screws so many woman who work for nhs

Another who will be replying on dh pension

Having said that he closed his pension and its invested so if he dies it all comes to me

The flaw in this article, though - it assumes that the woman taking maternity leave and/or going part-time has a stable career or job that can withstand the breaks. I don't know of many sectors that would allow a woman to stay in her job throughout. In mine, most childfree woman and all men my age have permanent contracts - whereas virtually all women with kids (and most disabled people) lurch hand-to-mouth between short term casual contracts.

@ragged I pay £144 on 22k at 7% contribution (ISH), I fully expect to increase that next year to nearly £200 if I get my 4.5% payrise (I can contribute up to 10%) Plus my employer contributes a lot towards my pension.