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To many people pensions are not particularly sexy. I, however, find pensions fascinating.

Going back a decade or so I worked for two organisations that were at the forefront of alleviating pensioner poverty. I was privy to all manner of information showing that we’re on the verge of a pensions apocalypse in the UK.

One of the major issues I used to deal with was female pensioner poverty. This tends to be a bigger issue for women because mums, as opposed to dads, often take five years out of the workforce when they become mothers and frequently return to part time work once their children are at school.

I think this chap retired with a good pension. I worry I may not be so fortunate.
I think this chap retired with a good pension. I worry I may not be so fortunate.

To be blunt women often pay less into personal pensions than men and miss-out on all important National Insurance contributions that would guarantee a full state pension. Divorce, widowhood and poor health frequently complicate matters.

But what of us stay at home dads? We may be a relatively small population but we face identical issues when it comes to retirement income.

Since I gave up full time work to look after the kids I’ve often wondered about my own pension. With my background it’s something I actually lose sleep over because I know that I’m making all the classic mistakes that have led to generations of stay at home mothers seeing out their later years eeking out an existence on a tiny pension.

The other week I was pleasantly surprised to receive an email from the savings and pensions specialist Standard Life. I’ll paraphrase but essentially the email said; “John, have you thought about writing a blog about stay at home dads and their pensions?”

Knowing that I’m personally making every pensions mistake in the book I had indeed given plenty of thought to writing just such a blog piece. Standard Life’s email has basically spurred me on to write it.

As regards state pensions, the goal posts are about to move for everybody. In 2016 the Government will introduce a new single-tier state pension. In theory it will be more equitable and easier to administer but there are elements to it that all stay at home parents need to be aware of.  

At present you need to pay 30 years’ worth of National insurance contributions to qualify for a full state pension. This will shortly increase to 35 years.

The state pension age will also increase in 2020 to 66 years of age, rising again to 67 shortly afterwards. The age will be reviewed every five years so further increases are likely within your lifetime.

Julie Russell from Standard Life provided me with the following advice for stay at home dads (although it applies equally to mums): “Finding the time to sit and review all your plans will be the challenge, but its importance cannot be overstated. Office for National Statistics data shows that we’re living longer; more than a third (36 per cent) of people in 2013 will live to be 100. Retirement can now last for decades, which is a long time to fund your lifestyle

and family without a household salary.

“Making sure you save the right amount of money at the right time in the right place is vitally important, as is ensuring you’re able to maximise your tax free saving and State benefits, such as the single-tier pension.” 

On that note I’m off to sell all my personal possessions on Ebay. All profits will be poured into the Dadbloguk.com pension fund.    

For further help with planning your finances and for your retirement visit www.yourfuturemoney.co.uk.

9 thoughts on “Pensions and the stay at home dad”

  1. david white (@davidwhite020)

    Interesting article, Dad!

    There seem to be a number of reasons why people don’t provide sufficiently for their retirement. One of them is the poor performance of pension funds in recent years. Exactly 25 years ago I took out a pension policy with Standard Life. It was linked to my mortgage and the idea was that, after 25 years and when I entered retirement, it would pay off the mortgage and provide me with a modest pension.

    In fact the capital sum it has delivered is only about one-third of the amount of the original mortgage. Fortunately, in my case I was able to pay off the mortgage some years ago when I inherited some money from my mother. However a lot of people are not so fortunate, and find themselves entering retirement with substantial mortgages still round their neck.

    Despite the above I still think it’s important to try to provide for retirement. Living just on the State Pension (which a lot of people have to do) is not easy.

  2. I have the feeling that by the time I reach state pension age, it will have increased by a few more years. So I work some more until I reach the new raised pension age…during which time it will have increased again! And so on! I fear I’m never going to get to retire on a pension!
    Having said that…I wish I could afford to be a SAHD Dad. Id rather worry about my children first and be there for them, and worry about my own money afterwards.

    1. Hi Paul. Trust me, the state pension age will keep on increasing. If you think about the maths it has to. Let us assume that you will live to 100 (not inconceivable). You’d spend 1/3 of your life in education, 1/3 working and the final third in retirement. The system just cannot cope with that.

      When the state pension age was introduced, life expectancy for men was 66. The state only supported you for the one year, not a third of your life.

      Alas I find myself in the position of worrying about my kids and worrying about my pension! Such is life as an SAHD. C’est la vie!

      1. Laurence Little

        While I agree with the general theme and accept state retirement age will continue (rightly as John says) to advance incrementally from now on it is an interesting interesting split of thirds given here. I would have said more accurately if you were 65 in 2010 the split would be 5 years (6%) pre-school, 13 years (15%) at school (not so many at university in those days) but even the extra 3 years doesn’t make it a third, 47 (56%) years at work until state pension and then 18.4 years (22%) in retirement. These figures are based upon the ONS life expectancy figures at 65 (not at birth). Not quite 1/3, 1/3, 1/3 then. My split is in fact slightly worse as I will be one of the first to wait until 66 for first payment of State Pension. BTW despite my age I have two sub teen children hence my interest in this blog. Still as you say c’est la vie – as long as possible I hope!

        1. Thanks for taking the time to do the maths Laurence. If you live to be 100 then I believe it would be more of a three way split but who knows, the actuaries keep underestimating life expectancy!

          Whatever happens, the state pension is not going to be nearly enough to support us in old age.

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  6. I’ve often wondered what would happen when it comes to a stay at home dad and pensions.

    For the last nine years I have been a stay at home dad collecting no money from the government my wife had a decent job. So it was better for her to stay at work and for me to stay at home. I am now working but will definitely fall short of 35 years paying in to a state pension giving that I am 48 years old. I have now decided maybe I should start paying into a private pension to top up what I will get as a state pension what would you say. I get paid roughly £3,550 Per year at my part-time job.

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