Balancing pension contributions with family expenses
Raising children comes with new financial responsibilities, but continuing pension contributions ensures long-term financial security for you and your family.
If money is tight, consider adjusting your contributions rather than stopping them altogether. If you stop them altogether, your employer might stop their contributions too. You can always increase your contributions again later on.
If you would like to adjust your contributions with us, speak to your employer about how to do this. They will change your contributions from your pay, and let us know.
Pension contributions while on maternity or paternity leave
While you are off, if you receive maternity or paternity pay then your pension contributions will continue for this period. If your contributions are a percentage of your pay, and your pay reduces during this period, your pension contributions will reduce too.
Individual employers might have their own policy on what happens to your pension during maternity or paternity leave, so it’s worth double checking this.
Topping up pension contributions after maternity or paternity leave
When you’re back from maternity or paternity leave, this could be a good time to think about topping up your pension to make up for any reduced or missed contributions. Have a think whether this is right for you and your finances as you might feel you have other priorities.
For our pensions, you could look at increasing your monthly contributions for a while. If you want to do this, speak to your employer and they will set this up for you. You could also save a one-off lump sum into your pension. Doing this will give your pension a healthy boost, and you can claim tax-relief back on the money you put in.
For other pension schemes, if one parent takes time off work or works part-time, the other can contribute to their pension to help maintain retirement savings. Some pension schemes allow spousal contributions, which can be useful if one partner earns significantly more.
State Pension and National Insurance Credits
If you or your partner take time off work to care for children, you may qualify for National Insurance credits, which help maintain your State Pension entitlement.
Having a full National Insurance history is important in making sure you receive a full State Pension. You can check your own National Insurance history by going to your Personal Tax Account, or creating a Government Gateway login to access your account.
When you are logged in, select ‘View your National Insurance Record’ and then choose ‘View Payable Gaps’. You can then see whether you’re able to top up any gaps online.
You need 35 years of National Insurance contributions for a full State Pension. If you still have a long time to go before you reach State Pension age, you might fill these years without having to fill in any gaps.
You won’t be able to pay for gaps online if you were self-employed or if you’ve lived or worked abroad. You have to call the Pension Future Centre first on 0800 731 0175 or +44 (0)191 218 3600 if phoning from outside the UK.
Junior pensions for your children
You can set up a Junior SIPP (Self-Invested Personal Pension) for your child, allowing them to benefit from tax relief and compound growth over decades. Even small contributions now can grow into a substantial retirement fund for them.
Your child will only be able to access this when they are older.
Updating beneficiaries
Often with pensions, money is due when you die. If you would like some or all of this money to pass on to your children, make sure your pension provider has updated beneficiary details.
For our pensions, if there is a lump sum, we can pay this to your children. If they are under 18, we might look at paying this into a trust for them to access later. We may also pay part of your pension to your children until they reach 18, or until they are 23 if they continue in education.
Long-term planning
Having children can mean new financial commitments. Some of these commitments might be long-term. Think about how your pension fits into your overall family financial plan, including savings for education, housing, and future expenses (such as nursery fees or family holidays).
Remember, you can adjust your pension contributions. But try and keep saving into your pension to keep it building up. This will give you and your family long-term financial security.
