Posted: 11th May 2015
Everyone needs to plan ahead for retirement. Women, however, often have career patterns which are very different from men’s and so need to give special thought to their pension arrangements. The basic State Pension will give you a start but to have the lifestyle you want in retirement you need to think about a second pension…and the sooner you can start the better.
Two million women face the prospect of poverty in old age because they are failing to accrue a state pension. No young woman at the age of 28 can predict whether at 60 she will have had children, be a single parent, be in work, be married, divorced or widowed, be caring for an elderly relative, or be in robust health – yet each and every one of these ‘personal’ events will shape her pension prospects.
If you are an employee, you may be able to build up a secondary state pension on top of the basic State Pension. But when you are self-employed, you are not able to build up an entitlement to a secondary state pension.
Also, if you are self-employed, you cannot join an occupational pension scheme unless you also work for an employer that operates one. But you can join and make payments into a stakeholder or personal pension plan. These can be suitable for women who expect to take career breaks.
With most stakeholder and personal pensions, you agree to make regular payments, say once a month, over a fixed period of time. These schemes can also be a suitable option if you chose to consolidate any existing pension benefits in to a pension scheme. Women will need to make sure any second pension they choose allows for their working pattern and personal circumstances.
You are not certain to make a profit. You may make a loss. You may not get back the full amount you invested.