Over 50 per cent of women could be missing out on pension tax relief by not contributing to a pension fund during career breaks.
According to research by HSBC, thousands of women are missing out on the tax benefits offered by stakeholder pensions as many opt to take a break from their career to raise children.
The research revealed that almost half of the women questioned mistakenly believed that they had to be in full-time work to make contributions to a pension scheme.
Ian Martin, head of pensions at HSBC said the survey revealed the "worrying" situation whereby women are seriously damaging their final retirement fund but not making contributions during their time off work.
The pensions company said that a woman will on average take 18 months to five years off work to stay at home with their children.
If the average women then opts not to make any pension payments for the full five years then she could potentially end up with a final pension fund that is 28 per cent lower than someone who made regular payments throughout any career break, according to HSBC's calculations.
A stakeholder pension could prevent this situation from occurring, advises Mr Martin from the insurance company.
"Stakeholder pensions are a great solution for women who have opted to take a career break while raising their children," he said.
"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."
Women missing out on pension tax relief
Pensions Quote Line
0845 108 0505
Women missing out on pension tax relief
Wed, 29 Mar 2006
Recommended links
HSBC: Women more prepared for retirement pensionWomen warned against retirement pension poverty
Calls for better pensions for women
Stakeholder Pensions Guide
Make a free pension enquiry
Pensions.co.uk is part of a large network of financial sites created to help advise you on life events, such as buying a house, Mortgages.co.uk; insuring your car - CarInsurances.co.uk; your life - LifeInsurance.co.uk; and your home - HomeInsurance.co.uk.
1998 - 2007 UK Pensions - Planning before, at the onset and during retirement.
| pensions news |
|---|
| Women embracing pension accounts - Mon, 12 May 2008 |
| Crisis for pension plans - Fri, 09 May 2008 |
| New accounting rules will impact on pensions, Allianz say - Wed, 07 May 2008 |
| More News |
Pensions Newsletter
Please enter your email below and subscribe to our monthly newsletter
Save on Your Mortgage
Would you like to save money on your mortgage? Fill out our quick mortgage enquiry form.
Protect Your Health
Find Critical illness, Life and Private Medical Insurance PMI policies.