British Women Miss Out On Pension Benefits

Six in ten women are not contributing to a pension fund, potentially losing out on pension tax relief, according to a report from a well known international bank. While the research shows that the level of understanding about pensions is on the rise, an alarming number of women mistakenly believe that they have to be working to pay into a pension.

Thousands of women in the UK who take career breaks to have children are missing out on tax benefits that stakeholder pensions can offer. Stakeholder pensions are available to anyone irrespective of their working status. This will seriously compromise their final retirement fund - particularly for those women who stop making contributions for a number of years while raising their children at home.

The head of pensions and retirement income at the bank said: "Stakeholder pensions are a great solution for women who have opted to take a career break while raising their children. However, very few mums are taking advantage of the fact that they, their spouse or someone else can continue to pay into a stakeholder pension in their name even if they are not working."

He continued: "Women around the country are missing a trick by not taking advantage of the pension options available to them."

HSBC calculated that the average woman, making a £100 per month pension contribution, had her first child at 27 and took a career break of up to five years, could stand to achieve a retirement fund 28 per cent less than if she had carried on contributing.

The stakeholder pension was introduced in 2001, but the research shows that people are still failing to use them to their full potential. The government introduced the stakeholder pension to supplement the state pension. Anyone can start a stakeholder pension it does not need to be linked to your employer.

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