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Info Centre - Thinking about your pension

This article is published from the Money for Mums website: www.moneyformums.co.uk.

Your pension may seem like a long way off and not really something you’d be considering at this time, but you should remember that your maternity leave could have an affect on it.

State Pension

Anyone who earns less than £90 a week or who takes time out from work could face a shortfall in their state pension when they come to retire. This is because these periods normally appear as gaps in your National Insurance (NI) record.

If you are being paid Statutory Maternity Pay (SMP), you will be paying NI contributions as normal, so you needn’t worry about a shortfall in your pension. If you receive Maternity Allowance (MA) however, it’s likely you won’t be paying NI contributions unless you are self-employed and have arranged to pay these separately.

However, if you claim Child Benefit, you’ll receive ‘Home Responsibilities Protection’ from the Government to make these amounts up – but this only comes into effect once the child is born.

Company Pensions

If you are a member of a company pension scheme, you might find that these payments are affected because you’ll be earning less during your maternity leave. This will also be the case if you decide to go back to work part-time. You may not need to when you look at your budget, but if your pension scheme allows it, you could consider taking a short-term break from making pension repayments.

Personal Pensions

If you have a personal pension, you don’t have to be in full-time work to continue making payments into it. However, if your personal pension scheme allows it you might need to consider taking a break from payments. If you have one, contact your Independent Financial Advisor to discuss your options.