What is the value of a mother?
It has been calculated that taking into account the cooking, cleaning, nursing, tutor, personal assistant, therapist, chauffeur and and and……..the value of a mother is around £160,000 per annum.
What sort of pension would a mother expect, if she had been paid?
- For “Silver surfer” mother on the brink of reaching her retirement age, she may have been in a defined benefit scheme throughout her life and due to receive a pension of over £100,000 per annum. She would have completely blown the Lifetime Allowance! I hope that she had applied for protection or possibly considered taking her benefits early. There are a number of strategies that can be applied by people whose value of pension exceeds the Lifetime Allowance but it is worth remembering that, if the tax is less than the value of the benefit that you have received from your employer, paying the tax is worthwhile
- For “Empty nester” mother who has waved goodbye to her offspring, she may have a combination of defined benefit and defined contributions. The combination of both pensions may see her with an income of £71,000 per annum at retirement. She will still exceed the Lifetime Allowance despite the much lower income. These “50 something” are the first generation that are having to take responsibility for their own retirement income.
- For our “00s” mother, she has probably never heard of defined benefit. Her income at retirement is likely to be around £53,000 per annum. She is expected to live until age 92 and has a 28% chance of reaching 100, like Dame Vera Lynn.
Of course, the reality is that mothers do not have pension rights. But here are some top tips to make sure that mothers get some retirement income.
- Maternity leave – your employer has to keep up your pension benefit when you are on maternity leave
- State pension - If you give up work to look after children, it is important that you register for Child Benefit to get National Insurance credits towards the State pension.
- Returning to work - you should be automatically enrolled into your workplace pension scheme, subject to meeting the eligibility criteria and earning at least £10,000 per annum. If you do earn less than £10,000, you can still ask your employer to join the workplace pension scheme and you will get employer contributions if you earn more than £5,824 per annum.
- Saving towards your pension - When your child is age 3, you may be eligible to get Government help with your childcare costs. If this gives you some extra money, it is a good opportunity to put some of this into savings.
- Grandparent – And one day, you may be looking after your children’s children! Grandparents caring for grandchildren under 12 could qualify for National Insurance credits that can top up their State pension.
If you'd like to find out more about the topics in this article or have questions about your pension rights more generally, please give out team a call on 0300 123 1047 (Monday - Friday 9-5)