5 simple ways to boost your pension after parental leave

Parental leave is a precious time to bond with your children and support your family. While this time is wonderfully rewarding, it can also impact your retirement savings.

Fortunately, there are several things you can do to get back on track and help secure the retirement you want. Here are five practical ways to boost your pension after parental leave.

1. Check your pension status

Your pension contributions may have changed during parental leave. If you’re employed and entitled to statutory maternity pay, you and your employer will continue making pension contributions for up to 39 weeks, at the same level as before your leave. If you’re entitled to paternity leave, contributions usually continue for up to two weeks, unless you choose to pause them¹.

If you took more time off, didn’t have a workplace pension or stopped making contributions, this can affect your state pension entitlement as well as the overall size of your pension pot. Knowing your current pension status helps you spot any shortfalls and plan your next steps. For your state pension, you can check your expected amount and eligibility on the government’s website. This will show how much you’re expected to receive, at what age, and what you can do to increase your entitlement.

For workplace and personal pensions, contact your pension provider or log into your online account to review your current savings and contributions.

2. Restart your contributions as soon as you can

Try to resume your pension contributions as soon as you can. If you’re employed, the combined contributions from you and your employer can add up significantly over time. Under auto-enrolment, you contribute 5% of your salary and your employer adds 3%². For someone earning £45,000 a year, this would grow to about £200,000 after 25 years, assuming 5% annual growth after fees and both your salary and the auto-enrolment earnings thresholds rise by 3% a year.

Some employers will match or even exceed your contributions if you choose to increase your own. Speak to your HR department to learn about their policies and make sure you’re making the most of any valuable benefits.

3. Consider saving into a SIPP

If you’re self-employed or your employer only offers the minimum auto-enrolment contribution, saving into a self-invested personal pension (SIPP) can help you fill any pension gaps. In a previous article, we showed that even modest contributions can add up impressively over time and are a powerful way to grow your retirement savings.

Raising children often comes with extra financial pressures, but small changes to your spending habits can make a big difference. For example, switching to a cheaper TV package or cancelling unused subscriptions can free up cash. If childcare expenses are eating into your budget, see if you qualify for the government’s tax-free childcare scheme to help reduce costs.

If you’re self-employed, having a SIPP in place during parental leave will mean you have the option to carry forward any unused pension annual allowance in the future. Most people can pay up to 100% of their gross (pre-tax) relevant earnings into their pension each tax year, up to a maximum of £60,000³. If you don’t use your full allowance, you may be able to carry forward unused amounts from the previous three tax years. However, you need have been an active member of a pension scheme during that time. Learn more about carry forward rules.

A SIPP also lets you combine pensions from previous jobs into one account. This cuts down on admin and gives a clearer view of your savings, making it easier to track your progress. If you consolidate your pensions with a lower-cost provider you’ll also save on fees, meaning more of your money is invested for your future. However, not all pensions are suitable for transferring. Find out what to know before starting a transfer and how to transfer your pension to Vanguard. 

4. Make the most of tax relief

Taking advantage of pension tax relief can give your retirement savings a valuable boost, making it easier to catch up after parental leave. For every £80 you pay into a pension, the government adds £20 in tax relief, increasing your contribution to £100. Higher-rate and additional-rate taxpayers can claim a further £20 or £25, respectively, through their tax return.

Even if you’re not earning, you can still benefit. Non-taxpayers can contribute up to £2,880 a year to a pension and the government will top this up by £720, boosting your pension contribution to £3,600. This is a fantastic way to keep your retirement savings growing while you focus on your family. Bear in mind that this allowance can’t be carried forward to future tax years. 

5. Boost your state pension

To qualify for the full state pension, currently £11,973 a year, you need to have made National Insurance (NI) payments or received credits for 35 years. Time away from work to care for children may leave gaps in your NI record, but claiming child benefit can help. If your child is under 12 and you claim child benefit, you’ll automatically get NI credits even if you’re not working. 

If you or your partner’s income exceeds £60,000 in a tax year, you’ll have to repay some of the child benefit you receive. Once income reaches £80,000, you’ll need to repay the entire amount⁴. However, it’s still worth claiming even if you’ll pay it back. The important thing is that you’ll receive the NI credits, helping to protect your full state pension entitlement for the future.
 

¹ For more information on parental leave and your pension visit Money Helper's website.  

² The auto-enrolment minimum contribution for the tax year 2025-26 is 8% of your salary between £6,420 and £50,270. The 8% comprises 5% from you (including tax relief) and 3% from your employer.

³ For more on what counts as ‘relevant earnings’ that can earn tax relief when used to fund a pension, see the HMRC Pensions Tax Manual. Your annual allowance might be lower than £60,000 if you have a high income or you’ve already flexibly accessed your pension pot. To work out if you have a reduced (tapered) annual allowance, see HMRC’s website.

⁴ You can find out more about the high income child benefit charge on the government’s website.
 

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Eligibility to invest in a Vanguard Personal Pension depends on your individual circumstances. Please be aware that pension and tax rules may change in the future and the value of investments can go down as well as up, so you might get back less than you invested. You cannot usually access your pension savings or make any withdrawals until the age of 55, rising to the age of 57 in 2028.

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