”I haven’t got a pension,” say most working mums

Many working mums do not have a pension, according to a new survey carried out by Workingmums.co.uk.  We look at why women are failing to prepare properly for retirement and what they can do about it to ensure they can look forward to a comfortable old age without having to scrimp on necessities.

Many working mums do not have a pension, according to a new survey carried out by Workingmums.co.uk.  We look at why women are failing to prepare properly for retirement and what they can do about it to ensure they can look forward to a comfortable old age without having to scrimp on necessities.

Our survey said
In response to our question ”Do you pay into a pension?” more than half (51%) of working mums polled told us they had no pension at all and would be relying on the state pension when they reach old age.  One mum said: ”Though I would seriously love to, I am too skint to pay into a pension at the moment – it’s hard to make ends meet as it is!”
Nearly a quarter (24%) said they had an employer pension, while less than one in 10 (8%) said they have a private pension.   
Our survey also revealed the economic downturn has forced 12% of working mums to reduce or cancel altogether contributions to their pensions.  ”I have always paid into a pension (private) since I joined my current employer six years ago,” one mum told us.  ”However due to the increase in all aspects of every day life and my wages having not been increased in the last six years at all, I have had to stop my pension payments as this is an extra bill I simply cannot afford.  I expect many families find themselves in the same position and although I am only in my late 20s, I do wonder about what position I will be in once I hit retirement age (if it still exists by then).  I would rather pay extra off of my mortgage in the hope that I could sell the house at a profit and invest the money.”

Saving for the future
The statistics are worrying.  Around seven million people are currently not saving enough to deliver the pension income they are likely to want or expect in retirement, warns the Department for Works and Pensions.  In 2009, 13 million jobs had no pension provision – up 2.4 million since 1997.
Younger people are less likely to be saving in a pension than their older peers.  Only 11% of people aged 16-24 are contributing to a private pension, 44% aged 25-34 and 58% aged 45-54.  The earlier people get into the saving habit the easier it can be for them to achieve their retirement goal – a person aged around 40 would have to save about twice as much as a person starting to save aged 20, to achieve the same level of retirement income.

Why do women in particular have no pensions?
”Clearly, the high proprotion of women who said they did not have a pension is of concern, and the outcome of your survey is largely similar to previous information we have collected on this subject,” Marta Phillips, chief executive of The Pensions Advisory Service,  told Workingmums.co.uk.
”Our experience is that because of caring, budgetary and other responsibilities, many women tend to rely heavily on the state pension system without appreciating how much it will provide them, or are reliant on the retirement saving of their spouse or partner.  The simple truth is that if we want to have a comfortable retirement, reasonably free from financial worries or reliance on others, we need to save for it.  A pension is a savings product designed solely to give to you an income when you retire from work.”
One mum told us she is relying on her husband’s pension provision.  She said: "I’ve been a stay at home mum for ten years now and have always relied on my husband to sort finances for now and the future.  It’s only with my husband’s pension looking a little insecure that I’m starting to think I should have set aside funds years ago when I was working.  There needs to be more education on saving for the future.”

Protecting your state pension
Some mums may have given up work completely or taken a long career break to look after their children, but will be unaware of the need of National Insurance contributions.  In order to qualify for a full basic state pension, a person must have accumulated at least 30 years of National Insurance contributions when they reach state pension age.  For information, click here.
The Government plans to introduce automatic enrolment from 2012, which will mean employers are required to automatically enrol eligible employees into a workplace pension scheme and make minimum contributions.
Everyone employed in Great Britain will be enrolled automatically into a pension provided they are aged at least 22, have not yet reached state pension age, earn more than £7,475 year and are not already in a suitable pension scheme.

www.pensionsadvisoryservice.org.uk

Helpline for Women and Pensions: 0845 600 0806.





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