How can stay at home parents build a pension?

Saving for a pension can be particularly daunting for those without a full time income and so it is not surprising that those looking after a family are amongst the least likely to save for retirement. 

Without an income to add to the retirement pot, full-time parents can easily find themselves having to rely on the state pension to see them through retirement. With that unlikely to be enough to fund a decent quality of life it is worth considering how else the pension could be boosted.

To qualify for the full state pension you will need to have amassed 35 years of NI credits. The good news is that years as a parent will count towards this providing you are registered for child benefit. People who don’t qualify for the full pension could consider topping up their contribution which does offer good value.  

For those about to embark on maternity leave and who are already contributing to a workplace pension scheme make sure you stay part of the scheme during you leave. This is important even for those who aren’t planning to return, as your employer will still be adding to the pot.

When you do eventually leave the workplace scheme you will have several options to consider in order to best utilise your pension pot. Opening a Lifetime ISA if you are under 40 or a personal pension could both be good options as they boost contributions by 25% for basic rate tax payers. Some consider the Lifetime ISA to be a better option than a pension as they benefit from tax free withdrawals.

We would also recommend reviewing if you have any old pensions from previous jobs, even if they were part time. Finding additional pensions gives you the option of pooling them together in a new scheme to achieve better returns. The pension tracing service is a great starting point to trace any old pensions.