You might have already started thinking about saving for retirement. But it's also worth bearing in mind other big events that can happen during your working life and what effect, if any, they might have on your pension.
To help you bridge the gap between your working life and retirement, we've put together six points you might not have considered.
When you get married you become legally responsible for your partner, so your plans for the future naturally become shared. As well as your own earnings and savings, you become aware of your other half’s situation too. You or your partner might need to consider supplementing the other’s shortfall in retirement saving and increase contributions into your pension.
A wedding and honeymoon could put you under financial pressure, so you might be inclined to pause your contributions for a short time. Just remember that any time you take a break from paying into your pension fund you’ll also miss out on contributions from your employer and tax relief. For support on budgeting, check out the Money Advice Service’s budget planner.
If you get divorced, then you might be required to share your pension with your ex-spouse as part of a divorce settlement. There might also be wider financial implications of a divorce that impact your ability to save, perhaps prompting you to pause your contributions for a short time. Just remember that any time you take a break from paying into your pension fund, you’ll also miss out on contributions from your employer and tax relief.
If you plan on having a child, it’s a good idea to ask your employer what happens to your workplace pension contributions during maternity or paternity leave as it can change from company to company. Depending on what your employer says, you may want to consider contributing more into your pension fund to offset any reduced employer contributions.
Having children can bring an increase in responsibilities and financial outgoings. These finance changes might prompt you to pause or stop your workplace pension contributions. Just remember that any time you take a break from paying into your pension fund you’ll also miss out on contributions from your employer and tax relief. If you decide to stop your monthly contributions entirely, you might want to think about making a lump sum payment at a later date as a way of catching up for the time spent not saving.
If your children leave home, it’s possible you’ll have more disposable income on your hands. You might choose to use this to make lifestyle changes or increase your retirement contributions - just remember to balance supporting your children and taking care of yourself in later life.
It’s a hard thing to plan for, but at some point in your life you might need to care for others. This could be for multiple reasons, such as accommodating ill health, old age or disabilities. Looking after others can potentially put a strain on your finances, available working hours and ability to save. You therefore might be inclined to pause contributions into your pension. Just remember that any time you take a break from paying into your pension fund, you’ll also miss out on contributions from your employer and tax relief.
If you go travelling, for example on a sabbatical, you always have the option of pausing contributions while you are away. You can do this easily through your online account. Just remember that any time you take a break from paying into your pension fund you’ll also miss out on contributions from your employer and tax relief.
If you become no longer classed as working or living in the UK, payments into your pension will stop. However, the money already in your pension fund will remain invested until you decide what you would like to do with it. Bear in mind, wherever you live, the rules of when you can take your money out of a UK pension don’t change.
Depending on where you live abroad, there may be elements to consider when it comes to the tax you pay on any payments that are made into your pension.
Purchasing a house is a large financial commitment and for many the biggest they will ever make. But it doesn’t replace the need to save for your retirement pot. While a property is a long-term purchase, in most cases it won’t substitute for a pension.
If you can get into the habit of making regular contributions to your pension fund as early as possible, you can give yourself added security in later life and bolster any returns that come from your property.
For some people, paying off their mortgage ahead of saving for retirement is their preferred strategy to prepare for the future. However, it might be more effective to consider your pension as well as your mortgage at the same time. Mortgages and pensions do not need to be at odds with each other. In fact, balancing the two can be the best way to achieve the retirement you want.
Once your mortgage has been paid off you might find you have more financial freedom. It’s well worth considering putting some of this money towards your retirement.
If you get a salary increase at work, you might be unsure of what the finance change means for your pension situation and how you can increase your payments. Some employers don't increase contributions after a pay increase, so it's important to find out how your employer defines pensionable earnings.
You may want to consider making a lump sum payment into your pension so that you can have a stronger chance of a more comfortable retirement pot for yourself in later life. Read about what this means in terms of tax on our tax relief page. If you change jobs and your new employer happens to have Nest as their pension provider, you can combine the pot from your old job and your new job into one.
If you receive an inheritance or bonus, it’s a perfect opportunity to consider making a lump sum payment into your pension. Read about what this means in terms of tax on our tax relief page.
Redundancy can be an understandably stressful situation to deal with. Contributions will come to an automatic stop once you are no longer working for your employer.
However, when you’re working again and are auto-enrolled by a new employer, you’ll be able to return to paying into a workplace pension and getting the benefits of employer contributions and tax relief. Read how you can transfer pension pots here.
If you have gone into debt and are worried about what that means for your retirement prospects, see our page on balancing pensions and debt to learn more.
You can see how much you’ve got in your retirement pot, make extra contributions and change the way your money’s being looked after at any time by logging into your online account.