‘Saving into a pension is a luxury’: The mothers worried about retirement - The i Paper
By Google News Personal Finance ·
Whilst starting a family comes with many joys, there are also big sacrifices – with mothers often having to abandon saving for the future to deal with the immediate cost of childcare.
Jessica Tabaka, 38, is one such mother who is not sure how she’ll ever build up enough money to retire, having only got saved £29,000 so far in her pension.
“Pensions are a luxury rather than a necessity when you’re thinking about childcare and the costs of living for today,” she said.
The mum-of-three says childcare commitments meant she has earned a “pathetically low” salary, so her pension contributions have always been low or non-existent.
Jessica, who lives in south London, is married to Bart, a product manager, and has children Theo, eight, Felix, six and Sofia, three over which time she took as long as she could on each maternity leave as she said “there was no financial incentive in returning earlier”.
“I have always been in creative fields – I studied fashion and worked for Paul Smith for 10 years,” she explained.
“I was on a low salary as creative jobs don’t pay a lot of money. When I went back to work after having Felix, even with my mum helping out with childcare one day a week, and me looking after them one day, I could only just afford to send them to childcare three days a week.
“Even then, my entire salary was wiped out by childcare costs. At that time, there weren’t the extended free childcare hours and you only got them after your child turned three, so it did not make any sense to go back earlier than you needed to.”
Jessica is not the only one. A recent YouGov survey found that 42 per cent of mothers on low and middle incomes said they had little or no choice to reduce their pension incomes because of childcare responsibilities.
The highest salary Jessica earned at Paul Smith was £28,000 and when she re-trained, to work at an interior design company, she was on £24,000.
“When I was working for these companies, although I was contributing to a pension through employer schemes, I wasn’t able to max out my contributions. I was just putting the bare minimum in and the employer was too.”
Jessica started her own interior design company two years ago and has only just started paying £50 a month from her business into her pension pot, which now has £29,000 in.
“Life is so expensive and childcare is so expensive. Everyone feels panicky about pensions, but no one knows what to do about it. Pensions are low down on the list of priorities because it is so far away in the future.
“I am hoping I can increase my pension contributions over time. But the future feels very uncertain.”
Campaign group Pregnant Then Screwed says mothers are sacrificing their pension savings because of childcare responsibilities, contributing to a gender pay gap which leaves women with an average of 33 per cent less pension wealth than men.
Throughout their working lives, women are more likely to work part-time or make career compromises to care for children.
The data shows that 36 per cent have reduced their working hours because of childcare, while 28 per cent had taken time out of work after having children. Some 18 per cent said they were having to prioritise childcare costs over pension saving.
Rachel Grocott, CEO of Pregnant Then Screwed, said: “Women live longer, yet they also make up most of the pensioners who are living in poverty.
“This is a huge kick in the teeth on mums for simply doing the right thing for their family.”
Agnes Agyepong, 41, is…
Originally published by Google News Personal Finance
