Many stay-at-home parents end up sleepwalking into a pension gap. But having a family shouldn’t mean you can’t look forward to a comfortable retirement.
An estimated two-in-three of us will have to take time out of paid work to care for someone at some point in our working lives, according to The Carer’s Pension Gap report. The most common reason being childcare.
For every year missed of paid work, the loss to a pension pot’s an estimated £5,000, on average. For every year that someone goes part-time instead of full-time, the average loss to a pension pot’s an estimated £2,000.
The good news is with the right approach, you can still build a decent pension pot and make the most of government support designed to help stay-at-home parents.
Why do pensions matter for stay-at-home parents?
Regular pension contributions are vital. For example, opting out of pension saving for just three years in your 30s could reduce your pension pot by over £17,000.
Since two-in-three people will take time out of work to care for someone at some point, it’s important to understand how to safeguard your future pension - even if you’re not in paid employment now.
5 steps to building your pension as a stay-at-home parent
1. Consolidate your old pensions
If you’ve had several jobs or worked irregularly before becoming a stay-at-home parent, it’s easy to lose track of your pension savings. Old workplace pensions can sometimes be forgotten or left untouched. Nearly one-in-ten workers believe they could’ve lost a pension pot worth more than £10,000, according to the Centre for Economics and Business Research.
Finding these pensions and considering combining them into one pot can make managing your retirement savings simpler. You can read our article, 4 steps to finding a missing pension, to find out more about finding and consolidating old pensions.
2. Check your State Pension forecast
The State Pension is a regular payment you can get from the government once you reach State Pension age (66, rising to 67 from 2028). To qualify for the full new State Pension you must have paid 35 years of National Insurance (NI) contributions during your working life.
It’s important to keep an eye on your State Pension forecast. The government’s online tool shows how much State Pension you’re likely to receive and highlights any gaps in your National Insurance record. If you find gaps, you may be able to pay voluntary contributions to fill them and boost your future pension.
3. Claim your Child Benefit
Many stay-at-home parents worry about missing out on NI contributions. Fortunately, claiming Child Benefit for children under 12 years old can earn you NI credits that count towards your State Pension entitlement and help cover periods when you’re out of paid work.
Even if your household income is too high to receive Child Benefit payments without incurring a charge, you should still claim it to get the NI credits. Many avoid claiming because of the High Income Child Benefit Charge, which applies if one partner earns over £50,000. But, you have the option to claim the benefit and then opt out of payments, still securing the valuable NI credits without receiving the money.
You can read our article, Why parents need to make a Child Benefit claim to protect their State Pension, if you’d like to know more about the importance of claiming Child Benefit.
4. Consider if you’re eligible for Marriage Allowance
If you’re married and a low earner, you could benefit from Marriage Allowance. The standard Personal Allowance is £12,570 (2025/26), which is the amount of income you don’t have to pay tax on.
Marriage Allowance allows you to transfer £1,260 of your unused Personal Allowance to your spouse, reducing their tax bill by up to £252 a year. This could help free up household income that your partner could pay directly into your pension.
5. Build your pension pot
This brings us to personal pensions. Most UK taxpayers get tax relief on their pension contributions, which means that the government effectively adds money to your pension pot. Usually basic rate taxpayers get a 25% tax top up; meaning HMRC adds £25 for every £100 you pay into your pension making it £125.
The good news is you don’t need to be employed to start saving into one. You can open a personal pension and you, or your partner, can make contributions. In fact, if you earn less than £3,600, or you don’t earn anything at all, you’re still allowed to receive tax relief on pension contributions.
This means you contribute up to £2,880 and receive a 25% tax top up from the government (2025/26). This could work out as contributions of £240 a month with an extra £60 received in eligible tax relief. Over time, this could make a significant difference to your pension savings.
Summary
Taking time to raise your children is an important decision and shouldn’t jeopardise your financial future. By claiming Child Benefit to protect your NI record and keeping an eye on your pension savings, you can gradually work towards a retirement that suits your needs.
While it may seem daunting at first, saving for your pension doesn’t need to be complex or costly. Even modest, regular contributions or your partner’s support can add up over time. With some careful planning and the right approach, you can build a pension that offers peace of mind when you retire.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
