Retirement planning for stay-at-home mums

Making the choice between having a fully-fledged career and being a stay-at-home mum is one that a lot of women have to make. While some look for a life that allows for a career outside the home along with being a mother, more and more women are now opting to become stay-at-home mums. An important reason for this is a desire to be involved in their child’s development and formative years. In addition, the constantly rising cost of child care in the UK is another key factor that leads to many women opting to be stay-at-home mums.

In such a situation, where the mother isn’t stepping out of the house for professional work, it is easy to forget that she doesn’t have a regular source of income and may not be thinking about planning or saving for her retirement. Stay-at-home mums tend to get so busy with taking care of the home and their family that they forget to take care of themselves and their financial future. This can be a huge mistake, since stay-at-home mums have an even greater need to plan for their financial security, more so than their spouses who are bringing in a regular income. However, all is not lost. A lack of early retirement planning can be easily rectified by a few simple steps to ensure a safe and financially secure life right till the end.

Be involved in financial planning

Planning for your future is vital and the sooner these plans can be put in place and worked on, the better it is in the long run. For those couples where the mother has opted to stay at home, planning out the future and the ways in which the household income gets used and invested needs to be a joint task. It is important for the mum staying at home to be as involved in the financial decisions for the future as her spouse. This is of importance in the eventuality of the death or disability of the income-earning partner. Ensure you and your family members are adequately insured in case of such events. And, as the mum managing the home, it is important for you to be aware and abreast of these decisions in order to manage them by yourself in the future if need be.

Know your pension and NI entitlements

While planning your retirement future in tandem with your spouse is good, it is equally important for you, as a stay-at-home mum, to build some retirement savings in your own name.

An important thing to remember here is that even though you might not be part of a professional organisation any more, your years as a parent still qualify towards your state pension. As long as you are registered for child benefit (with your eldest child under 12), you will get National Insurance (NI) credits for the time spent at home. Another point worth remembering is that if you are in a workplace pension scheme, it is advisable to stay in it. These pension plans tend to have lower charges than standard personal pensions and allow your funds to remain invested (even if there aren’t any further contributions made) until the time you begin collecting your pension. This reduces risk and aims at protecting the value of your funds as you come closer to your retirement age.

Opt for forced savings

As a stay-at-home mum, you do everything you can to give your children the best start in life. That is one of the major reasons behind the decision to stay at home after all. So, prioritising your needs over those of your children can feel rather counterintuitive. However, it is important to remember that between saving for your retirement and your child’s college education, in a single-income household, it is perfectly acceptable to be a bit selfish and opt to save for your future. After all, an education loan can always be taken out but the same can’t be said about a retirement loan.

Along with this, forced savings are another great way of adding to your retirement funds. Maintaining a family budget and tracking your spending is important here. See what expenses are unnecessary and can be trimmed, and add the surplus from your weekly or monthly household budget to your retirement funds. Additionally, setting up an automated saving system, like a direct debit into your retirement account at the start of every month, is another great way of increasing your retirement funds.

Over and above, there are an increasing number of opportunities for stay-at-home mums to become small business owners and work from home, thus providing the luxury of balancing home with a career. A home-based business can be tailored to the skills of the mother, giving her an outlet to reemploy the expertise she gained prior to becoming a stay-at-home mum. Not only this, earnings from a business can contribute to retirement funds at the same time as allowing the mum to be just as involved in the lives of her children and in the home as she was previously.

If you feel that you possess the skills required to become a small business owner, then you might want to contact the Arise network. Arise is a leading provider of virtual business solutions. We provide a virtual platform that connects primarily work-at- home service professionals running small call centre businesses to Fortune 500 and other large companies. To know more about us, get in touch today.