Legal & General recently warned that women taking a break from work and not contributing to a pension whilst bringing up children, could have their eventual pension severely reduced.
According to the insurer, women that take a pension contribution break for five years from age 30 and then retire at age 60, could lose upto 20%. By taking a five year break, Legal & General calculated that women would need to contribute an extra 50% of their usual payments on returning to work, to make up the difference.
Our View
Taking a break from work no longer means that you have to take a break from paying into your pension, as long as it is still affordable. Following the introduction of Stakeholder Pensions in 2001, anyone can contribute up to £3,600 per year without needing to have any income. If mothers taking a career break can still afford to pay at least something into a pension, stakeholder pensions could be a good idea and help to make up some of the losses associated with a break from work.
Learn more about pensions for women in the Pensions Adviser.com.
Try our range of pension calculators to see what you should be paying in or what you may receive.
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