Blog
A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
21/3/2023
Editorial
<p>The cost of living crisis grouped with the aftermath of the Covid-19 pandemic, the gender pay gap and late pension saving habits of some generations are among some of the main reasons why single mothers are classed as one of the most vulnerable groups in our society.</p><p>And they are not a small segment either. According to Scottish Widows’ latest Women and Retirement Report, released in November 2022<sup>1</sup>, there are nearly 1.7 million single mother households in the UK today, and they constitute 20% of households with children (there are also around 200,000 single fathers). </p><p>This Single Parents Day - 21 March - we look at how each one of the factors has impacted and collectively led to single mothers having to experience extreme financial difficulties in their daily lives and how they can be supported with saving for retirement. We do this together with Julie Ann Mavin – a professional, a pension saver and a single parent to a teenager. We’re bringing Julie Ann’s perspective in, hearing it first hand from someone who is living the working single parent life and knows what that encompasses – the good and the bad.</p><p> </p><h3>Single mothers taking the biggest hit<br></h3><p>Times are extremely hard for many people in the UK, but research shows that the cost of living is putting a major strain on single parents with single mothers being affected the most. There are a number of reasons for this with <strong>the gender pay gap</strong> and <strong>the cost of childcare</strong> taking a prevailing role. </p><p><br></p><h4>Women earning less than men<br></h4><p>The significant gender gap in income between men and women, with women earning a lot less than men, means women have less capacity to meet increasing financial demands. According to the report cited above, the average man earns over £30,900 a year with the average woman earning over £21,900.<br></p><p>PwC’s Women in Work Index 2023<sup>2</sup> found that what they call motherhood penalty – the financial strain put on women raising children – has become the most significant driver of the gender pay gap. The research also suggests that affordable childcare is paramount when it comes to helping mothers feel more financially secure and having a chance to get back on the career ladder in a timely manner.<br></p><p>But is the recent announcement made as part of the Spring Statement on 15 March that free childcare will be gradually introduced from next year a light at the end of the tunnel? The pensions industry has gladly welcomed the reform news in hope that the phased launch of long-awaited free childcare for under 3s could help close the gender pension’s gap. <br></p><p>Naturally, women take a much bigger hit than men, taking career breaks to have children, having more childcare responsibilities and having to take more time off work. This in turn has a direct impact on their income and saving habits. There is evidence that the current financial circumstances are having a direct impact on women’s attitude to saving for later life. 16% of women have said that they have to reduce the amount they put into their pension to be able to cope with pressing financial outgoings. The ‘Women and Retirement’ report also suggests that women are having to reduce the monthly contribution they make towards their life after work by an average of £152 per month . By doing so, they are taking a much bigger hit, missing out on benefits such as tax relief from the government and employer contributions towards their pension. <br></p><p>Julie Ann Mavin lives in Newton Aycliffe, in the North East of England, and is a single parent to a 15-year-old boy. She said she considers herself lucky as she hasn’t felt the need to change her pension contributions so far. Julie Ann also said that saving into a pension has always been of great importance to her and she’s been saving towards her future since she was 18. <br></p><p>“Having pension provision in place for when I retire has always been important to me but now as a single person it is even more important as I need to ensure that I can support myself when my working life comes to an end. It is also of some comfort that a death benefit would be paid if I was to pass away.<br></p><p>“Although it’s important to have money in the bank to provide a certain standard of living for your family, you also should think about the bigger picture and how you will afford to live later in life,” added Julie Ann.</p><p> </p><h4>Childcare costs and work patterns<br></h4><p>The cost of childcare in the UK can often take up a large proportion of the family budget of dual-parenting households, even more so for single parents. This can make things quite difficult for single parents who are having to juggle two very important roles – bread winners and main carers for their children. Single parents charity Gingerbread<sup>3</sup> has found that the lack of affordable childcare is what prevents single parents from going back to work or starting a job. <br></p><p>According to 2019 statistics released by Gingerbread, 40% of single parents find it difficult to meet their childcare costs. The percentage is likely to be a lot higher four years on, considering the current financial climate and the impact the Covid-19 pandemic has had on many aspects of daily life. Recent news about childcare becoming much more affordable from next year for under 3s will hopefully help ease off the financial strain and promote career development with single parents. <br></p><p>Julie Ann commented that although her son is now a teenager and she doesn’t have to factor in childcare costs in her monthly outgoings, she has definitely felt the pinch caused by rocketing inflation and the increasing cost of living. <br></p><p> “With the increase in the cost of food shopping and a 15% increase in school lunches, paying to feed a growing 15-year-old has become quite pricy!”<br></p><p>Research<sup>4 </sup>conducted last year (2022) highlights that the number of single mothers working part-time has increased to 54% compared to a national average of 21%. The problem with part-time working though is that for some women it might mean they won’t qualify for automatic enrolment into a workplace pension schemes as they may be earning less than £10,000 a year. To meet the eligibility criteria workers need to be earning that or more in a single role. <br></p><p>Gingerbread also found that the Covid-19 pandemic has only worsened the situation for single parents, as long-term unemployment has increased since the start of it in 2020.<br></p><p>“Many people were furloughed or made redundant during the pandemic which will have made things even harder for some single parents. Thankfully, neither happened to me. I was sent home to work but what I found quite challenging and stressful was trying to juggle working full-time, keeping productivity to a level whilst trying to ensure that Zach did his school work. At that point I couldn’t have any help from my parents as we weren’t allowed to mix households,” said Julie Ann.</p><p> </p><h3>Single mothers face poverty in retirement<br></h3><p>2022 data has also revealed that 58% of single mothers in the UK don’t meet the financial criteria to be automatically enrolled into a workplace pension with their pension wealth dropping at an all-time low of 40% during the Covid-19 pandemic. The private pension income of a single mother now stands at £11k a year (2022), down from £18.3k in 2020.<br></p><p>The dropping numbers are in stark contrast to what is needed by a single person to have a moderate life in retirement. According to the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards<sup>5</sup>, a single person needs over £23k a year to afford a moderate lifestyle.<br></p><p>The rather negative forecast seems to come as no surprise given the great financial hardship some single parents experience these days, having to juggle solo parenting and working life at the same time. The recent pandemic and the current financial climate are making things even harder for those groups to meet increasing financial demands, with saving for a pension taking a back seat for the foreseeable.</p><p> </p><h3>Saving today for a better tomorrow<br></h3><p>If you’re a single parent experiencing difficulties at the moment, it’s quite possible that saving for retirement isn’t a top priority for you at this moment in time. But here are a few tips on how to get on your saving journey without having to spend an awful lot. Knowing that you’re doing something to help fund your life in retirement will also help put your mind at peace. <br></p><ul><li><strong>Start now!</strong> </li></ul><p>Even if you haven’t been auto-enrolled into the pension scheme offered by your employer due to not meeting the £10,000 minimum earnings criteria, you can ask to join it any time. Ask today! If you do qualify, but you’ve opted out of the scheme some time ago, think about re-joining – it could make a huge difference to your future.</p><ul><li><strong>You don’t have to pay in half your salary to be saving for a</strong> <strong>pension</strong></li></ul><p>Paying into your employer’s pension scheme is brilliant and has lots of benefits, but if you’d prefer to save into a private one, that’s also an option. And remember, you don’t have to save loads from the get go – you can start with a small sum you can afford to give up in the beginning and then build it up as and when you can. Every little helps.</p><ul><li><strong>Remember, saving into a pension comes with lots of valuable benefits! </strong></li></ul><p>No matter how old you are, there are some fantastic benefits from saving into a pension. From contributions from your employer and tax relief on your savings - to life cover for your loved ones should the worst happens to you while you're still working - to an incapacity pension if you can't keep working because of ill health. They all come as part of the package!</p><ul><li><strong>Be proactive</strong> </li></ul><p>If you happen to receive a bonus or a pay increase, for example, think about paying more into your pension if you can. With the Railways Pension Scheme, you can consider paying in Additional Voluntary Contributions (AVCs). It’s a fantastic way to give your pension a bit of a boost as you get tax relief on what you put in, you can save as little as £2 per week if you wish and you don’t need to save a set amount every month.</p><p> </p><p> </p><h2>Works Cited</h2><p><sup>1</sup> Scottish Widows Women and Retirement <a href="https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf" data-sf-ec-immutable="">https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf</a> </p><p><sup>2 </sup>PwC Women in Work Index 2023 <a href="https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html" data-sf-ec-immutable="">https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html</a> </p><p><sup>3</sup> Gingerbread <a href="https://www.gingerbread.org.uk/policy-campaigns/childcare/" data-sf-ec-immutable=""><em>https://www.gingerbread.org.uk/policy-campaigns/childcare/</em></a><em></em></p><p><sup>4</sup> Now: Pension and Pension Policy Institute research <a href="https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/" data-sf-ec-immutable=""><em>https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/</em></a><em> </em></p><p><sup>5</sup> PLSA Retirement Living Standards <a href="https://www.retirementlivingstandards.org.uk/" data-sf-ec-immutable=""><em>https://www.retirementlivingstandards.org.uk</em></a><em> </em></p><p> </p>
<p>The cost of living crisis grouped with the aftermath of the Covid-19 pandemic, the gender pay gap and late pension saving habits of some generations are among some of the main reasons why single mothers are classed as one of the most vulnerable groups in our society.</p><p>And they are not a small segment either. According to Scottish Widows’ latest Women and Retirement Report, released in November 2022<sup>1</sup>, there are nearly 1.7 million single mother households in the UK today, and they constitute 20% of households with children (there are also around 200,000 single fathers). </p><p>This Single Parents Day - 21 March - we look at how each one of the factors has impacted and collectively led to single mothers having to experience extreme financial difficulties in their daily lives and how they can be supported with saving for retirement. We do this together with Julie Ann Mavin – a professional, a pension saver and a single parent to a teenager. We’re bringing Julie Ann’s perspective in, hearing it first hand from someone who is living the working single parent life and knows what that encompasses – the good and the bad.</p><p> </p><h3>Single mothers taking the biggest hit<br></h3><p>Times are extremely hard for many people in the UK, but research shows that the cost of living is putting a major strain on single parents with single mothers being affected the most. There are a number of reasons for this with <strong>the gender pay gap</strong> and <strong>the cost of childcare</strong> taking a prevailing role. </p><p><br></p><h4>Women earning less than men<br></h4><p>The significant gender gap in income between men and women, with women earning a lot less than men, means women have less capacity to meet increasing financial demands. According to the report cited above, the average man earns over £30,900 a year with the average woman earning over £21,900.<br></p><p>PwC’s Women in Work Index 2023<sup>2</sup> found that what they call motherhood penalty – the financial strain put on women raising children – has become the most significant driver of the gender pay gap. The research also suggests that affordable childcare is paramount when it comes to helping mothers feel more financially secure and having a chance to get back on the career ladder in a timely manner.<br></p><p>But is the recent announcement made as part of the Spring Statement on 15 March that free childcare will be gradually introduced from next year a light at the end of the tunnel? The pensions industry has gladly welcomed the reform news in hope that the phased launch of long-awaited free childcare for under 3s could help close the gender pension’s gap. <br></p><p>Naturally, women take a much bigger hit than men, taking career breaks to have children, having more childcare responsibilities and having to take more time off work. This in turn has a direct impact on their income and saving habits. There is evidence that the current financial circumstances are having a direct impact on women’s attitude to saving for later life. 16% of women have said that they have to reduce the amount they put into their pension to be able to cope with pressing financial outgoings. The ‘Women and Retirement’ report also suggests that women are having to reduce the monthly contribution they make towards their life after work by an average of £152 per month . By doing so, they are taking a much bigger hit, missing out on benefits such as tax relief from the government and employer contributions towards their pension. <br></p><p>Julie Ann Mavin lives in Newton Aycliffe, in the North East of England, and is a single parent to a 15-year-old boy. She said she considers herself lucky as she hasn’t felt the need to change her pension contributions so far. Julie Ann also said that saving into a pension has always been of great importance to her and she’s been saving towards her future since she was 18. <br></p><p>“Having pension provision in place for when I retire has always been important to me but now as a single person it is even more important as I need to ensure that I can support myself when my working life comes to an end. It is also of some comfort that a death benefit would be paid if I was to pass away.<br></p><p>“Although it’s important to have money in the bank to provide a certain standard of living for your family, you also should think about the bigger picture and how you will afford to live later in life,” added Julie Ann.</p><p> </p><h4>Childcare costs and work patterns<br></h4><p>The cost of childcare in the UK can often take up a large proportion of the family budget of dual-parenting households, even more so for single parents. This can make things quite difficult for single parents who are having to juggle two very important roles – bread winners and main carers for their children. Single parents charity Gingerbread<sup>3</sup> has found that the lack of affordable childcare is what prevents single parents from going back to work or starting a job. <br></p><p>According to 2019 statistics released by Gingerbread, 40% of single parents find it difficult to meet their childcare costs. The percentage is likely to be a lot higher four years on, considering the current financial climate and the impact the Covid-19 pandemic has had on many aspects of daily life. Recent news about childcare becoming much more affordable from next year for under 3s will hopefully help ease off the financial strain and promote career development with single parents. <br></p><p>Julie Ann commented that although her son is now a teenager and she doesn’t have to factor in childcare costs in her monthly outgoings, she has definitely felt the pinch caused by rocketing inflation and the increasing cost of living. <br></p><p> “With the increase in the cost of food shopping and a 15% increase in school lunches, paying to feed a growing 15-year-old has become quite pricy!”<br></p><p>Research<sup>4 </sup>conducted last year (2022) highlights that the number of single mothers working part-time has increased to 54% compared to a national average of 21%. The problem with part-time working though is that for some women it might mean they won’t qualify for automatic enrolment into a workplace pension schemes as they may be earning less than £10,000 a year. To meet the eligibility criteria workers need to be earning that or more in a single role. <br></p><p>Gingerbread also found that the Covid-19 pandemic has only worsened the situation for single parents, as long-term unemployment has increased since the start of it in 2020.<br></p><p>“Many people were furloughed or made redundant during the pandemic which will have made things even harder for some single parents. Thankfully, neither happened to me. I was sent home to work but what I found quite challenging and stressful was trying to juggle working full-time, keeping productivity to a level whilst trying to ensure that Zach did his school work. At that point I couldn’t have any help from my parents as we weren’t allowed to mix households,” said Julie Ann.</p><p> </p><h3>Single mothers face poverty in retirement<br></h3><p>2022 data has also revealed that 58% of single mothers in the UK don’t meet the financial criteria to be automatically enrolled into a workplace pension with their pension wealth dropping at an all-time low of 40% during the Covid-19 pandemic. The private pension income of a single mother now stands at £11k a year (2022), down from £18.3k in 2020.<br></p><p>The dropping numbers are in stark contrast to what is needed by a single person to have a moderate life in retirement. According to the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards<sup>5</sup>, a single person needs over £23k a year to afford a moderate lifestyle.<br></p><p>The rather negative forecast seems to come as no surprise given the great financial hardship some single parents experience these days, having to juggle solo parenting and working life at the same time. The recent pandemic and the current financial climate are making things even harder for those groups to meet increasing financial demands, with saving for a pension taking a back seat for the foreseeable.</p><p> </p><h3>Saving today for a better tomorrow<br></h3><p>If you’re a single parent experiencing difficulties at the moment, it’s quite possible that saving for retirement isn’t a top priority for you at this moment in time. But here are a few tips on how to get on your saving journey without having to spend an awful lot. Knowing that you’re doing something to help fund your life in retirement will also help put your mind at peace. <br></p><ul><li><strong>Start now!</strong> </li></ul><p>Even if you haven’t been auto-enrolled into the pension scheme offered by your employer due to not meeting the £10,000 minimum earnings criteria, you can ask to join it any time. Ask today! If you do qualify, but you’ve opted out of the scheme some time ago, think about re-joining – it could make a huge difference to your future.</p><ul><li><strong>You don’t have to pay in half your salary to be saving for a</strong> <strong>pension</strong></li></ul><p>Paying into your employer’s pension scheme is brilliant and has lots of benefits, but if you’d prefer to save into a private one, that’s also an option. And remember, you don’t have to save loads from the get go – you can start with a small sum you can afford to give up in the beginning and then build it up as and when you can. Every little helps.</p><ul><li><strong>Remember, saving into a pension comes with lots of valuable benefits! </strong></li></ul><p>No matter how old you are, there are some fantastic benefits from saving into a pension. From contributions from your employer and tax relief on your savings - to life cover for your loved ones should the worst happens to you while you're still working - to an incapacity pension if you can't keep working because of ill health. They all come as part of the package!</p><ul><li><strong>Be proactive</strong> </li></ul><p>If you happen to receive a bonus or a pay increase, for example, think about paying more into your pension if you can. With the Railways Pension Scheme, you can consider paying in Additional Voluntary Contributions (AVCs). It’s a fantastic way to give your pension a bit of a boost as you get tax relief on what you put in, you can save as little as £2 per week if you wish and you don’t need to save a set amount every month.</p><p> </p><p> </p><h2>Works Cited</h2><p><sup>1</sup> Scottish Widows Women and Retirement <a href="https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf" data-sf-ec-immutable="">https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf</a> </p><p><sup>2 </sup>PwC Women in Work Index 2023 <a href="https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html" data-sf-ec-immutable="">https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html</a> </p><p><sup>3</sup> Gingerbread <a href="https://www.gingerbread.org.uk/policy-campaigns/childcare/" data-sf-ec-immutable=""><em>https://www.gingerbread.org.uk/policy-campaigns/childcare/</em></a><em></em></p><p><sup>4</sup> Now: Pension and Pension Policy Institute research <a href="https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/" data-sf-ec-immutable=""><em>https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/</em></a><em> </em></p><p><sup>5</sup> PLSA Retirement Living Standards <a href="https://www.retirementlivingstandards.org.uk/" data-sf-ec-immutable=""><em>https://www.retirementlivingstandards.org.uk</em></a><em> </em></p><p> </p>
Blog
Comfortable retirement for single parents
Is comfortable retirement is a mirage for single parents, especially single mothers?
The cost of living crisis grouped with the aftermath of the Covid-19 pandemic, the gender pay gap and late pension saving habits of some generations are among some of the main reasons why single mothers are classed as one of the most vulnerable groups in our society.
And they are not a small segment either. According to Scottish Widows’ latest Women and Retirement Report, released in November 20221, there are nearly 1.7 million single mother households in the UK today, and they constitute 20% of households with children (there are also around 200,000 single fathers).
This Single Parents Day - 21 March - we look at how each one of the factors has impacted and collectively led to single mothers having to experience extreme financial difficulties in their daily lives and how they can be supported with saving for retirement. We do this together with Julie Ann Mavin – a professional, a pension saver and a single parent to a teenager. We’re bringing Julie Ann’s perspective in, hearing it first hand from someone who is living the working single parent life and knows what that encompasses – the good and the bad.
Single mothers taking the biggest hit
Times are extremely hard for many people in the UK, but research shows that the cost of living is putting a major strain on single parents with single mothers being affected the most. There are a number of reasons for this with the gender pay gap and the cost of childcare taking a prevailing role.
Women earning less than men
The significant gender gap in income between men and women, with women earning a lot less than men, means women have less capacity to meet increasing financial demands. According to the report cited above, the average man earns over £30,900 a year with the average woman earning over £21,900.
PwC’s Women in Work Index 20232 found that what they call motherhood penalty – the financial strain put on women raising children – has become the most significant driver of the gender pay gap. The research also suggests that affordable childcare is paramount when it comes to helping mothers feel more financially secure and having a chance to get back on the career ladder in a timely manner.
But is the recent announcement made as part of the Spring Statement on 15 March that free childcare will be gradually introduced from next year a light at the end of the tunnel? The pensions industry has gladly welcomed the reform news in hope that the phased launch of long-awaited free childcare for under 3s could help close the gender pension’s gap.
Naturally, women take a much bigger hit than men, taking career breaks to have children, having more childcare responsibilities and having to take more time off work. This in turn has a direct impact on their income and saving habits. There is evidence that the current financial circumstances are having a direct impact on women’s attitude to saving for later life. 16% of women have said that they have to reduce the amount they put into their pension to be able to cope with pressing financial outgoings. The ‘Women and Retirement’ report also suggests that women are having to reduce the monthly contribution they make towards their life after work by an average of £152 per month . By doing so, they are taking a much bigger hit, missing out on benefits such as tax relief from the government and employer contributions towards their pension.
Julie Ann Mavin lives in Newton Aycliffe, in the North East of England, and is a single parent to a 15-year-old boy. She said she considers herself lucky as she hasn’t felt the need to change her pension contributions so far. Julie Ann also said that saving into a pension has always been of great importance to her and she’s been saving towards her future since she was 18.
“Having pension provision in place for when I retire has always been important to me but now as a single person it is even more important as I need to ensure that I can support myself when my working life comes to an end. It is also of some comfort that a death benefit would be paid if I was to pass away.
“Although it’s important to have money in the bank to provide a certain standard of living for your family, you also should think about the bigger picture and how you will afford to live later in life,” added Julie Ann.
Childcare costs and work patterns
The cost of childcare in the UK can often take up a large proportion of the family budget of dual-parenting households, even more so for single parents. This can make things quite difficult for single parents who are having to juggle two very important roles – bread winners and main carers for their children. Single parents charity Gingerbread3 has found that the lack of affordable childcare is what prevents single parents from going back to work or starting a job.
According to 2019 statistics released by Gingerbread, 40% of single parents find it difficult to meet their childcare costs. The percentage is likely to be a lot higher four years on, considering the current financial climate and the impact the Covid-19 pandemic has had on many aspects of daily life. Recent news about childcare becoming much more affordable from next year for under 3s will hopefully help ease off the financial strain and promote career development with single parents.
Julie Ann commented that although her son is now a teenager and she doesn’t have to factor in childcare costs in her monthly outgoings, she has definitely felt the pinch caused by rocketing inflation and the increasing cost of living.
“With the increase in the cost of food shopping and a 15% increase in school lunches, paying to feed a growing 15-year-old has become quite pricy!”
Research4 conducted last year (2022) highlights that the number of single mothers working part-time has increased to 54% compared to a national average of 21%. The problem with part-time working though is that for some women it might mean they won’t qualify for automatic enrolment into a workplace pension schemes as they may be earning less than £10,000 a year. To meet the eligibility criteria workers need to be earning that or more in a single role.
Gingerbread also found that the Covid-19 pandemic has only worsened the situation for single parents, as long-term unemployment has increased since the start of it in 2020.
“Many people were furloughed or made redundant during the pandemic which will have made things even harder for some single parents. Thankfully, neither happened to me. I was sent home to work but what I found quite challenging and stressful was trying to juggle working full-time, keeping productivity to a level whilst trying to ensure that Zach did his school work. At that point I couldn’t have any help from my parents as we weren’t allowed to mix households,” said Julie Ann.
Single mothers face poverty in retirement
2022 data has also revealed that 58% of single mothers in the UK don’t meet the financial criteria to be automatically enrolled into a workplace pension with their pension wealth dropping at an all-time low of 40% during the Covid-19 pandemic. The private pension income of a single mother now stands at £11k a year (2022), down from £18.3k in 2020.
The dropping numbers are in stark contrast to what is needed by a single person to have a moderate life in retirement. According to the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards5, a single person needs over £23k a year to afford a moderate lifestyle.
The rather negative forecast seems to come as no surprise given the great financial hardship some single parents experience these days, having to juggle solo parenting and working life at the same time. The recent pandemic and the current financial climate are making things even harder for those groups to meet increasing financial demands, with saving for a pension taking a back seat for the foreseeable.
Saving today for a better tomorrow
If you’re a single parent experiencing difficulties at the moment, it’s quite possible that saving for retirement isn’t a top priority for you at this moment in time. But here are a few tips on how to get on your saving journey without having to spend an awful lot. Knowing that you’re doing something to help fund your life in retirement will also help put your mind at peace.
- Start now!
Even if you haven’t been auto-enrolled into the pension scheme offered by your employer due to not meeting the £10,000 minimum earnings criteria, you can ask to join it any time. Ask today! If you do qualify, but you’ve opted out of the scheme some time ago, think about re-joining – it could make a huge difference to your future.
- You don’t have to pay in half your salary to be saving for a pension
Paying into your employer’s pension scheme is brilliant and has lots of benefits, but if you’d prefer to save into a private one, that’s also an option. And remember, you don’t have to save loads from the get go – you can start with a small sum you can afford to give up in the beginning and then build it up as and when you can. Every little helps.
- Remember, saving into a pension comes with lots of valuable benefits!
No matter how old you are, there are some fantastic benefits from saving into a pension. From contributions from your employer and tax relief on your savings - to life cover for your loved ones should the worst happens to you while you're still working - to an incapacity pension if you can't keep working because of ill health. They all come as part of the package!
- Be proactive
If you happen to receive a bonus or a pay increase, for example, think about paying more into your pension if you can. With the Railways Pension Scheme, you can consider paying in Additional Voluntary Contributions (AVCs). It’s a fantastic way to give your pension a bit of a boost as you get tax relief on what you put in, you can save as little as £2 per week if you wish and you don’t need to save a set amount every month.
Works Cited
1 Scottish Widows Women and Retirement https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf
2 PwC Women in Work Index 2023 https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html
3 Gingerbread https://www.gingerbread.org.uk/policy-campaigns/childcare/
4 Now: Pension and Pension Policy Institute research https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/
5 PLSA Retirement Living Standards https://www.retirementlivingstandards.org.uk
