Cost of childcare putting women's pensions at risk

Soft toy nestling among twenty pound notes

Childcare costs could be putting women’s retirement finances at risk, according to the gender equality charity, the Fawcett Society.

Its research found that while women want to be financially independent, the costs of childcare mean they have had to scale back their pension contributions and as a result are becoming increasingly reliant on their partner’s retirement savings.

Sam Smethers, chief executive of the Fawcett Society says: “In particular women are taking a big hit on their pensions when they have children, but are not aware of the impact this will have on them in the long-term. Women are putting everyone else’s needs before their own, especially when it comes to who pays for childcare. Their baby becomes her childcare bill.”

The research, which was supported by Scottish Widows and conducted by The University of Sheffield, revealed that women frequently felt the need to take full responsibility for childcare costs, despite their husband or partner also benefiting from both parents being in work. It also found that women were typically unaware of the long-term consequences of arranging their finances in this way.


Ms Smethers adds: “Worryingly there are some really strong gendered attitudes being displayed here, with many of the women we interviewed not confident when faced with decisions about pensions and often asking men for advice. The interviews revealed that many of those in relationships were relying more on their partner for security in retirement than they realised. The 1950s male breadwinner model is alive and well in 2016.

“We need to make sure couples are aware of the impact of one partner cutting their pension contributions to pay for childcare and encourage them to share these costs more equally, including encouraging fathers to contribute to their partner’s pensions if they are taking time out of work to care.”


The charity is also recommending women are sent targeted pension information when they start their maternity leave that explains the impact of reducing pension contributions and has proposed a ‘carers credit’ that would see women’s private pensions credited when they take time off to raise a family.

Further reading


For more top tips on boosting your income, see our How to make money from your sofa and Top 20 ways to make money in your spare time guides. You can also read How Moneywise team members make money from home.

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