- Time away from work can mean missed pensions contributions and potentially a lower retirement income
- You may be able to make extra pensions contributions before or after your time off
- Isas are also a tax-efficient way to save for retirement
If you take a career break to raise children, care for a relative, travel or pursue another project your first financial concern is probably financing the time out. But another important consideration is missed pension contributions. Stopping these for even a relatively short period can have a huge impact on the eventual size of your retirement savings, especially if you miss out on an employer’s as well as your own pension contributions. So try to minimise and compensate for the shortfall.
If your career break is to have children and you are contributing to a workplace pension while you are on statutory maternity pay, for up to 39 weeks, your employer has to continue making pensions contributions for you.