What happens to your pension when you take maternity leave?

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When you go on maternity leave (or paternity or adoption leave), your employer should still pay into your workplace pension on your behalf while you’re on paid leave.  That means you can continue building up your pension while you’re away from work.

Maternity leave and pensions: the basics
If you’re in a workplace pension and you go on maternity leave:

  • Your employer has to continue contributing to it for the first 39 weeks of maternity leave (called ordinary maternity leave), if they normally contribute to your pension on your behalf.

SAVVY TIP: Currently, there are some employers that have set up pension schemes for their workers, but that don’t contribute to it on their workers’ behalf. In the next few years there will be fewer and fewer of these schemes, as a new initiative called ‘automatic enrolment’ requires employers to set up a pension AND pay into it.

  • Your employer may pay into your pension while you are on additional maternity leave. This lasts from the 39th week. Your employer is only obliged to do this if you are paid during your additional maternity leave (i.e. they are not obliged to do this by law, but some may offer this as a workplace benefit).
  • If you want to stay in your pension scheme during the first 39 weeks: You will normally be expected to make pension contributions, unless you are in a workplace pension that doesn’t ask for any contributions from employees (called a non-contributory scheme).

Do you have to stay in your workplace pension?
You can leave your workplace pension during your maternity leave, but you won’t be able to get access to any of the pension money you’ve saved. It will remain there until you reach retirement age or at least age 55.

SAVVY TIP: I know that money will be tight while you’re on maternity leave, but think carefully before deciding to stop being a member of your pension scheme.

How much will you pay?
You and your employer will pay different amounts into your workplace pension while you’re on maternity leave.

  • Your pension contributions: the amount you pay into your pension while you’re on maternity leave will be based on your actual salary. So, if you’re being paid 90% of your salary, that’s what your contributions will be based on, but if you’re only getting 50% (for example, after the first six weeks of leave), your pension contributions would be based on 50% of your salary.
  • Your employer’s pension contributions: Your employer has to pay contributions based on your salary before you went on maternity leave, not your earnings during maternity leave.

SAVVY TIP: The contributions your employer makes during your paid maternity leave have to be the same as they would normally make while you’re at work. They can’t pay a lower rate into your pension just because you’re on paid (or ordinary) maternity leave.

When you return from maternity leave
When you return to work you can, if you wish, pay pension contributions for the 13 weeks during which you weren’t paid while you were on maternity leave. You should contact your pension scheme administrator or HR department about how to go about this.

SAVVY TIP: Depending on the rules of the scheme and your employment contract, your employer may make some contributions as well, but it doesn’t have to do so.

Related articles:

Maternity leave and pay: what are you entitled to?

Protecting your state pension when you have children

VIDEO: Money saving tips you’d pass onto your children

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