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Retirement: Be a Mum and Still Receive a £20,000 Pension

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Those of us parents who gave up work or reduced our hours to fit round the kids are less likely to be saving for retirement, unlike our full time working counterparts. Now, keep in mind that i’m no pensions expert, and of course, you should always get independent advice first, before you decide to do anything.

Now personally, even on a full time and part time wage, after living costs, it’s pretty much impossible for us to save anything, and having a pension isn’t even on my radar. It’s something I think about at the start of every month, then forget about quickly when the bills come crashing in, or the kids need more new shoes.

Take us for example. My husband brings home the bacon (so to speak) every month and has a workplace pension. A small amount gets paid in from his wages, and his company tops it up. From 2018, The Workplace Pension will be law, with all employees over 22 and earning at least £10,000 automatically enrolled.

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But what happens to the parents, like myself, who don’t earn anywhere near the £10,000 a year target, or who isn’t even considered a ‘worker’ by the government, as I’m self-employed.

Recently, the Office for National Statistics predicted that to live ‘as we do now’, the average householder would need a whopping pension of £21,770 a year.

Currently, the state pension offers an annual income of £8,000, if you have enough National Insurance credits (I’ll come to that in a bit) that is.

So if you’re a full-time parent or part time worker like me, then you need to ask yourself this: Could I survive on a yearly income of just £8,000 when I retire?

I know I couldn’t. That would mean selling the family home when I hit retirement age, or working longer, or going without. All the things none of us want to do when we get older.

So how does all this work?

Well, to cut a very complicated subject short, the state pension is all about credits, and this is where many of us will come up short.

You need to have 35 years of National Insurance (NI) credits to qualify.

Even as a stay at home parent, you qualify, as long as you’re registered for child benefit, and your youngest is under 12. But, and here is the stickler, to receive the full amount, you must have the 35 years NI credits, and having less than 10 years’ credits will see you get nothing, nada, zero.

£20,000 pension may still be in your grasp

So assuming you’re not a member of a defined benefit pension scheme, you will need to find at least £12,000 yourself from a defined contribution scheme. For those like me, who earn very little, this is going to take some very careful planning.

If you’re now panicking, and have no clue what’s going on, don’t worry, you’re not alone. There are plenty of things you can still do to maximise your pension, even if your contributions are tiny.

Pensions, Being a Mum, Stay at Home, retirement, Growing old, Saving for the Future

Child Benefit

Regardless of if you think you will be entitled to anything or not, register for child benefit.

If you’re a parent claiming for a child under 12, you’ll automatically get NI credits towards your state pension record if you don’t work, or don’t earn at least £5,824 year, like me!

Now it’s means-tested, 100,000s of parents don’t see the point in registering, and while you may get nothing for your trouble, if your household income is below £50,000 a year, you’ll probably get something, on top of those much-needed credits.

Workplace Pensions

If you’re already in a workplace scheme, then try and stay in. Even if you’re on maternity leave, your employer will still make their contributions as normal.

If you’re in a group pension, then you may still be able to make extra payments too.

Lifetime ISA

If like me, you earn very little, or nothing at all, then a private personal pension or ISA is for you.

If you’re under 40 on the 6th April 2017, then the Lisa (Lifetime ISA) offers us basic rate taxpayers a pension boost of 25%.

The other good thing about a Lisa is that it’s not taxed, whereas a personal pension still is when taken out.

Voluntary NI

For those of us who are self-employed, but earn under £5,965, then it may still pay to top up every year. I haven’t yet, even though it was only £2.65 a week. £2.65? That’s one less Starbucks a week for a state pension.

Lost Pensions

Over our lifetime, we all jump and leave jobs. It’s well known that over £400 million has been lost or forgotten about in old pension schemes.

Have a look and see if you have one, or contact The Pensions Tracing Service to help.


To my generation, who has got out of the habit of saving, all these numbers I’ve thrown at you may have come as a big shock.

The Office of National Statistics believes that everyone hitting mid-twenties, should be trying to save at least £246 a month, which should give them that nice £20,000 a year nest egg. It seems more important than ever to teach our children about saving money. Put it this way, if I started saving this month, to reach the £20,000 a year cushion I’d like, I would have to save a massive £509 a month and not retire till 72!  Gulp!

We should all be trying to save for our future, and there are plenty of ways we can be more frugal or make a little extra on the side.

£20,000 may be out of my reach now, but I’m hoping, like many parents, to start earning a better wage when the kids are older, and will start chucking the pounds in then. Am I putting my eggs in just one basket or playing with fire? Sure. But for now, that’s all I can personally afford to do.


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