In partnership with PensionBee

As a single parent, you’re likely to see a lot of changes in your income, whether it’s an initial drop following a separation or divorce or changing childcare costs and job changes as you try to work to fit around family life. Perhaps you’re planning on becoming a solo parent by choice and want to allow time off for fertility treatments, pregnancy and parental leave. When you’re up against it budget wise, pension contributions can feel like an easy sacrifice, but the truth is that they matter - and could make a big difference to your future financial stability. 

Fortunately pensions can be much easier to manage than you think. This guide is here to show you how to navigate pension contributions with the ups and downs of single parenting, so you can be sure you’re still building a solid future for yourself, even if your income isn’t always predictable.

Why pensions matter (even when it’s hard to prioritise them)

We totally get that you’ve got a lot on your plate already. As single parents we juggle work, childcare, money, meals - everything. When you’re only just about keeping on top of the endless requests of ‘what’s for tea’, retirement planning might feel like something you can afford to put off, but the reality is, the sooner you start thinking about your pension, the less you need to save in the long run.

For single parents, it's especially important. Without a partner’s savings to rely on, your pension could be one of the only things that keeps you financially stable when you retire. And the longer you leave it, the less time you’ll have to save and grow your pension.

Here’s the good news: pensions can be flexible. (Hooray!) You don’t have to make contributions all the time if you can’t afford it and it’s simple to make adjustments if your income changes. So even if you're on parental leave, working part-time, or doing a bit of freelancing, you can still stay on track with your pension.

Step 1: Take a moment to assess where you stand

If you’ve had multiple jobs, you might have an old work pension that you’ve forgotten about. But you might not know which provider it’s with, or how much is in it. The ‘not knowing’ can feel daunting and you stop before you even start. This is where a service like PensionBee can be really useful for helping you bring together your old pension pots into one easy-to-manage plan.

• Find any old pensions: Get in touch with previous employers to track down the details of pensions you had with them or, if you’re not sure who to contact, use the government’s free Pension Tracing Service.
• Combine your pensions: Make looking after your old pension pots simple by using PensionBee to combine them into one easy-to-manage plan.
• Check how much you’re contributing: Take a look at your payslips to see how much you’re putting into your pension at the moment. You might also be able to see how much your employer is contributing. It might be worth increasing your contributions to maximise employer contributions and tax relief - check the optimum contribution levels with your employer. 
• If you’re self-employed: If you’ve already set up your own pension, remind yourself of the details and how much you’re contributing. If you haven’t, it’s definitely worth doing - not only will you be investing in your future, but you’re also missing out on tax relief, which is essentially ‘free money’ from HMRC. If you’re operating as a limited company there could be extra benefits from contributions via the company.
• State Pension forecast: Don’t forget to check, if you’re eligible for the State Pension, and if you are how much you’ll be getting.You can easily check this online using the government’s State Pension forecast tool. If you’ve got any gaps in National Insurance contributions (NICs) because you’ve had periods where you weren’t working, you might be able to pay voluntary contributions to make up for it.

Once you know where you stand, you’ll have a clearer picture of what to do going forward, and how changes in your pension payments might affect your long term financial plans.

Step 2: What to do if your income drops

Single parents often experience drops in income - perhaps you go on maternity leave, or have to shift to part-time or more flexible, lower paid work to fit around the kids. When your income decreases, it might be tempting to stop contributing to your pension altogether, but it’s important to be aware that this can set you back in the long run.

Here are a few things to think about:

Keep contributing, even if it’s a small amount

It might not feel like much, but even small contributions can add up over time, so it’s better to carry on with whatever you can afford, even if it’s just £100 a month. Plus, basic rate taxpayers usually get a 25% tax top up, meaning HMRC adds £25 for every £100 you pay into your pension, making £100 worth £125. Higher and additional rate tax payers may benefit from even more tax relief via Self-Assessment. You can check how much you could get with PensionBee’s Pension Tax Relief Calculator.

Review your other savings

If you’ve stopped paying into your pension because you’re using all your spare cash for rainy day savings, take some time to consider where your disposable income is best placed. Yes it’s good to have an emergency fund, but you don’t get the same tax benefits on regular savings as you do on pension contributions, so you might be better off switching or at least splitting your spare cash between the two.

Know your rights at work

If you’re employed, work in the UK, are at least 22 and haven’t yet reached State Pension age and are earning over £10,000, your employer must automatically enrol you into a pension scheme and make contributions. If you earn less than £10,000, but above £6,240, your employer doesn’t have to automatically enrol you in their scheme. However, if you ask to join, your employer will be unable to refuse you and must make contributions on your behalf.

Step 3: Don’t forget about Child Benefit

As a single parent, Child Benefit isn’t just an extra income, it can also protect your future pension. When the rules around Child Benefit were originally made, meaning high earners no longer qualified, most people didn’t realise that when you don’t claim Child Benefit you also give up your right to National Insurance credits, which could impact your State Pension eligibility.

So, even if your income is too high to receive payments, you should still claim Child Benefit and then simply opt out of receiving the payments. This way you make sure you still get National Insurance credits, which are crucial for building your State Pension. PensionBee has a lot more information on their website about Child Benefit and pension entitlement. 

Step 4: What to do when your income rises

When your income goes up, whether from returning to full-time work, getting a raise, or starting a new job, it’s a good idea to reassess your pension contributions. As tempting as it can be to blow your new disposable income on a holiday or treats for the kids, it’s sensible to take the opportunity to boost your pension contributions if you can, even if you do keep some treat money back!

As well as directly paying more into your pension pot, there are a couple of useful hacks that you might not be aware of that could increase the value of your investment even more.

Use the carry forward rule

If you’ve missed out on contributing to your pension in the past, the carry forward rule allows you to use any unused contribution allowance from the previous three tax years. This is great if you’ve had lower income in previous years but now have the opportunity to contribute more. Just be careful to stay within your annual allowance limit. The annual limit for 2025/26 is 100% of your salary or £60,000, whichever is lower, and includes contributions paid by both you and your employer.

Maximise tax relief

The more you contribute to your pension, the more tax relief you could get. Most basic rate taxpayers usually get a 25% tax top up, so if you paid £100 into your pension, HMRC adds another £25, bringing the total contribution up to £125. PensionBee will claim this tax top up on your behalf if you’re paying into one of their pension plans.

Higher and additional rate taxpayers can claim further tax relief through their Self-Assessment tax returns. So, when your income increases, it’s a good time to think about increasing your pension contributions. Just make sure to stay within your annual allowance limits. 

Step 5: What about self-employed or freelance parents?

Self-employment offers flexibility, but it can make pension contributions trickier. If you’re self-employed, you don’t have an employer to set up and pay into your pension, so it’s up to you to set up your own pension and keep up with your contributions. The good news is that having your own personal pension means you have the flexibility to contribute as much or as little as you want, based on what you earn, plus you can still benefit from tax relief on your pension contributions, just like employees. 

The way you make pension contributions may differ depending on whether you’re working as a sole trader or are set up as a limited company. There can be significant tax advantages to making contributions from a limited company and you can easily set up either personal or company pension contributions if you have a PensionBee plan.

Self-employment can be a great option for single parents, but it does require some extra planning when it comes to your pension. However, with the right tools, it’s totally manageable. Setting up a self-employed pension with PensionBee can help you keep track of your contributions, even if your income varies month to month.

Step 6: Don’t be afraid to ask for help

If managing your pension feels like too much to handle on top of everything else, you don’t have to do it alone. There are plenty of resources to help you stay on top of things, including tools that make managing your pension easier.

• MoneyHelper is a great source of impartial, user-friendly information about all aspects of pensions.
• Unbiased can help match you with an expert financial advisor if you’d like extra help exploring your options.
• PensionBee offers free easy-to-use tools like their Pension Calculator and jargon-free explanations on how to manage your pension and retirement income, no matter your situation.
• The Frolo community is always on hand if you want to chat to other single parents about how they manage their pensions and savings.
  

Stay flexible with your pension

Managing your pension as a single parent can seem overwhelming, but with the right approach, it’s absolutely possible. Even when your income fluctuates, staying flexible with your contributions can ensure you’re still on track for a secure retirement.

Remember, every little bit counts. Whether it’s using National Insurance credits, taking advantage of tax relief, or using the carry forward rule, there are options available to help you manage your pension even when life gets complicated. By taking small steps today, you’ll be setting yourself up for a financially stable future.

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Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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About PensionBee

PensionBee can help you combine your old pension pots into one easy-to-manage online plan that lets you keep track of your balance, make flexible contributions, invest in line with your values and make withdrawals from the age of 55 (rising to 57 from 2028). For more information, visit PensionBee.

Learn how long your pension could last with the PensionBee Pension Calculator.

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