Pensions for stay at home parents

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 Could you survive on £8,000 a year or less, in retirement?
If you’ve given up work to look after your family, you’ll be among those least likely to save for retirement simply because you have no income.
And when it comes to the State Pension, you’ll usually need at least 10 qualifying years on your National Insurance to qualify. In other words, for 10 years and more, one or more of the following applied to you:

  • you were working and paid National Insurance contributions
  • you were in receipt of National Insurance credits, for example if you were unemployed, ill or a parent or carer
  • you were paying voluntary National Insurance contributions

If you have between 10 and 35 qualifying years you’ll receive a proportion of the new State Pension. You’ll need 35 qualifying years to get the full new State Pension of £159.55 per week. If you have 10 qualifying years you’ll get £44.50 and for 20 qualifying years you’ll get £89 per week.
So, as a full-time parent, you need to ask yourself ‘could I survive on £8,000 a year, or less in retirement?’
If you answered ‘no’ there are some practical things you can do now to save for your future retirement:
Child Benefit
Your years as a parent still qualify towards your state pension. As long as you are registered for child benefit, and your eldest child is under 12, you will get National Insurance (NI) credits for the time at home.
Workplace pension
If you were working and have taken maternity leave or paternity leave (by taking advantage of shared parental leave) and were enrolled in the workplace pension scheme you should stay in it. Your employer will continue to make contributions into your fund for the duration of your parental leave and in some cases you can continue making contributions if you can afford to do so.
Private personal pension
If you don’t have a workplace pension you could open a private personal pension and if you are a basic rate tax payer you will have your contributions topped up by 20% for a Basic Rate tax payer. So, if you invest £800 in to a pension you will have it topped up to £1,000.
If you are a full-time parent and your partner works you may want to consider asking them to pay in to a pension for you. If your partner pays into your pension, you automatically get tax relief at 20% if your pension provider claims it for you.
The value of your investment and any income from it may fall as well as rise. You may not get back the amount you originally invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen. 
To find out more about your or your partner’s pension options please get in touch.

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