Women who take a career break could see their pension reduced by as much as £3,800 a year, according to research by private bank Duncan Lawrie.
The report, which surveyed 2,059 people online and was conducted by YouGov on behalf of Duncan Lawrie, revealed that a quarter (25%) of respondents are currently taking a career break or plan to do so in the future.
For more than two-thirds (68%) of female respondents, the main reason for the break is to start, or look after, a family, while nearly one in ten (9%) see the break as an opportunity to travel or live abroad.
The research also found:
- 22% of female respondents planning a break have no idea how they are going to fund this time away from work.
- 28% of female respondents have made no plans to compensate for any loss, and only 11% plan to make up for it after returning to work by either working longer hours or by retiring later.
- 24% of female respondents do not think taking a career break will have a negative impact on their pension.
- 13% of male respondents are planning to take, or are currently taking, a career break and more than half (53%) are already setting money aside in order to be able to afford it.
- 11% of male respondents said the main reason to take time off is for childcare, while 29% choose to take time out to travel or live abroad.
Richard Boyd, a chartered financial planner at Duncan Lawrie (pictured), said: “When travelling or starting a family, pension planning is never going to be anyone’s primary concern.
“For some, a pension might be one spinning plate too many to manage, but its importance cannot be underestimated.
“Those that do let the plate fall may live to regret their decision later down the line.
“Funding in retirement is one of the greater economic issues that our country faces. While the government seeks ways of understanding how to better fund state pensions, people should be looking out for themselves and at their family’s long-term financial security.”