12 Tips About Women's Pensions

If you're a woman of any age concerned about retirement, do something now. Check out these simple tips to get your pension on track.

One thing that I know bores many of my friends senseless is pensions. Well, it's not the most interesting subject in the world for anyone. Many of us feel that we're either too young to really want to think about retirement, or that we've left it too late.

The thing is, although the earlier you can start stashing money away for retirement the better, it is almost never too late to start. And women really need to start thinking ahead as soon as possible, because although more of us are earning than ever before, many more women than men work part-time or take career breaks to bring up children or nurse elderly relatives, which of course means smaller pension pots when we retire.

So if you're a woman concerned about the future, or you'd just like to get your retirement plans in order, remember these tips and pointers:

If you don't already have one, try and set up a pension as soon as possible. Ideally, join your employer's pension scheme, especially if the company contributes too. (That's free money!) Alternatively, consider opening a low-cost stakeholder pension yourself.
Stash away £2,808 (the stakeholder limit) and tax relief will boost this sum to £3,600, even if you're not working. Incidentally, we can pay into other people's pensions without affecting the tax we pay, so, if you're not working, your partner could make your pension contributions on your behalf.
Higher-rate tax payers should remember that they can claim back a further 18% tax relief on their pension contributions via their annual tax return.
The earlier you can start paying into a pension the better, due to the miracle of compounding. What's more, as women are choosing to have families later in life, a great time to maximise pension contributions is when you have more disposable income, i.e. before settling down. So put down those Manolo Blahniks and stash that cash in your pension instead!
If you're on maternity leave keep those pension contributions up, even if you only get statutory maternity pay. This is because your employer must continue to pay a percentage of your full salary (if it already did so previously), while you simply pay the percentage of the maternity pay you're getting.
As a rule of thumb, if you're only just starting to think about funding your retirement, halve your age and aim to save that percentage of your income. So, if you're 30, stash 15% of your pay away each month until you retire. Remember that employer contributions count too so, if yours will match payments of up to 5%, you only need to pay 10%.
If you're unlucky enough to go through a divorce and have no real pension of your own, due to bringing up children etc, you may be able to claim a chunk of your husband's pension fund, to deposit into your own.
Get an idea of the pension you could be expecting by trying out this calculator.
If you are very close to retirement, it's worth thinking hard about whether or not to defer your state pension.
And if you're not keen on pensions, make sure you regularly contribute to an alternative savings vehicle for retirement. A good option can be a low-cost index tracker ISA.
If you are approaching retirement, take time to review your pension arrangements (and if you're married, don't forget to ask your husband to do them same). Moving higher risk funds to safer investments could help protect you from further stock market falls.
If you've paid off the mortgage and have a bit more disposable income, consider stashing some into your pension, or into an ISA to provide a lump sum at retirement. And if you're ready to buy an annuity, make sure you shop around carefully for the best rates.

Basic State Pension

Changes have been implemented this year which on the whole make things slightly better for anyone retiring after 6 April 2010. For a start, the number of qualifying years required in order to receive the full, Basic State Pension has been reduced from 44 years for men and 39 years for women to just 30 years for all. The State Pension is also due to rise in line with earnings, rather than prices, from 2012.

Instead of Home Responsibilities Protection (credits awarded to women receiving Child Benefit or Income Support to cover periods when a woman wasn't working) weekly National Insurance credits will instead be issued to those raising children under 12, or caring for severely disabled people for over 20 hours per week. And these credits can be used to gain qualifying years for both the Basic State and State Second pensions.

All of these changes do mean that the Pension Service's State Pension online forecast is currently out of action as it's being updated, so we'll have to wait until next autumn to use it. However, those that will retire before 2010 can still obtain a pension forecast the old-fashioned way, by obtaining a form BR19 from the Inland Revenue.

But, regardless of the changes, the State Pension is unlikely to provide even the most basic lifestyle for the majority of us. Which means (as you've probably suspected) the only person that can provide you with a half decent retirement is you. So get to work and start planning for it as soon as possible.