Career breaks are more common than you might think
Taking time out of work is something many of us will think about at some point. You might be caring for children, supporting a family member, retraining, travelling, focusing on your health or simply taking a pause.
And if you’re considering it, you’re not alone. Career breaks are particularly common among women, with the latest Scottish Widows Women and Retirement Report (PDF, 3.1MB) showing that around half of women have taken a career break during their working lives.
Taking time out can be positive — especially with a little planning
A career break can give you valuable time to focus on what matters most. It can be a positive and rewarding step, but it’s worth thinking about the financial side before you press pause.
Look at the full financial picture
It’s easy to focus on the here and now when you’re planning time out. But research from the Scottish Widows Women and Retirement Report (PDF, 3.1MB) shows that women are less likely to financially plan for a career break, even though it can affect their income, savings and pension. Before you take a break, it’s worth looking at more than just your monthly income. Think about your salary, savings, pension and day-to-day spending, and whether there are any changes you’d like to make before your break starts.
You might want to work out how long your break could last, what money you’ll have coming in and how you’ll cover both planned and unexpected costs. If your finances are linked with a partner or family member, it can also help to talk it through together.
Don’t forget your pension
Your pension might not be the first thing you think about when you’re planning time away from work. But it’s worth checking what happens to your contributions while you’re off. Even a short pause can make a difference over time, so understanding your options can help you decide what’s right for you.
- Check whether your pension contributions will continue during your break.
- Understand what happens to any employer contributions.
- Consider whether you can afford to keep paying in.
- Review your pension when you return to work.
Keeping your pension in the conversation can help you look after your future while making the most of your time out.
Plan your return as well as your break
A career break doesn’t have to knock your long-term plans off course. When you come back to work, it can be a good time to reset, review what’s changed and take small steps to get back on track.
When you return, you might be able to:
- Increase contributions
- Take advantage of employer matching
- Bring old pensions together, if it’s right for you
- Review your retirement goals
- Use planning tools to model different scenarios.
Small actions after your break can help you build confidence again and keep your future plans moving in the right direction.
Use tools to understand the impact
Our Retirement Calculator has a Career Break modelling functionality that could show the impact of what taking time out could mean to your pension. You can use it to explore different scenarios, see how a break might affect your retirement plans and think about the steps that could help you stay on track when you return to work.
Quick checklist before you take time out
Before you take a career break, it can help to ask yourself:
- Do I know how my income will change?
- Have I reviewed my pension contributions?
- Do I have enough emergency savings?
- Have I talked through the impact with my partner or family?
- Do I know what support or benefits I may be entitled to?
- Have I modelled the long-term impact on my retirement plans?
Taking time out with confidence
Career breaks can be an important and positive part of life. The key is feeling informed and prepared, so you can make choices that work for you now and help protect the future you’re building.
With a bit of planning, you can take time out with more confidence. By understanding the impact on your income, savings and pension, and using the tools and guidance available through Be Money Well, you can stay connected to your long-term goals while making space for what matters today.