<p class="subtitle">We explore what you should consider when it comes to your pension savings if you are, or have ever been, working part-time.
People choose to work part-time for many reasons: childcare, caring responsibilities, semi-retirement or even just to find a better work-life balance. But when you’re thinking about going part-time, it’s important to think about more than just the impact on your salary – consider your pension savings, too.
Our research found that those working three days a week for an extended period were up to £119,000 worse off by the time they reached retirement compared to full-time workers. Even switching to part-time for a shorter period could still come with a pension penalty.
However, there are some things you can look out for to make sure you’re getting the most out of your pension savings.
So, what do you need to be aware of as a part-time worker when it comes to your pension?
Auto-enrolment in a workplace scheme
Auto-enrolment is where your employer automatically sets up a pension plan for you and pays into it on your behalf. Some employers will also offer matching schemes where they’ll pay more into your pension plan if you do, too. If your employer offers this, it’s well-worth taking advantage of - particularly if you’re part-time and your pension payments are lower than you’d like. Think of it this way: if you’re able to afford to pay an extra percentage or two into your plan, it could effectively be doubled by your employer.
Although being part-time doesn’t impact your eligibility for auto-enrolment, your salary might. If going part-time means your salary drops to less than £10,000 a year, your employer doesn’t have to automatically enrol you into a pension scheme. However, if you earn less than £10,000 but more than £6,240, then you can ask your employer to include you in the scheme and make contributions for you – and they can’t say no.
So if you’re in this situation, make sure to speak up and get what you’re entitled to. And, if you can’t join a workplace pension scheme, be sure to set up your own pension plan. You won’t get the employer payments, but you will still get a lot of great tax benefits which will help you to grow your savings over time. To find out more about the benefits of a pension plan, read our pension basics guide.
Your State Pension
The amount of State Pension you get is based on the number of years of National Insurance (NI) contributions you’ve paid or been credited with, and when you start claiming it. You’ll usually need at least 10 years of qualifying NI contributions to get any State Pension, but you’ll need 35 years’ worth to get the full new State Pension.
So if working part-time has meant that you haven’t paid as many NI credits as you’d like, it’s something to consider as it could impact the amount you get from your State Pension later.
You can have a look at your State Pension forecast to check how much you’ll get when the time comes. You can also check your National Insurance record online, which will show you how many years of full contributions you’ve made so far.
If you find you’re behind, you do have the option to make voluntary NI contributions to fill gaps in your record. Usually the deadline for this is 6 April, but this year it was extended to 31 July. This is because this is the last year you’ll be able to fill gaps in your NI record from as far back as 2006. After the July deadline, you’ll only be able to plug gaps from 2017 onwards.
You can find out more about voluntary NI contributions, how to make them and how much of a difference they could make in our article.
Women are more likely than men to work part-time
Women are more than three times as likely as men to work part-time, so it’s important to keep in mind that it will often be women who have to think more carefully about whether they’re on track for the retirement they want. It’s why working part-time is a key contributor to the gender pension gap.
Often the reason for moving to part-time is childcare, and women tend to be more likely than men to give up working full-time to provide it. In fact, research has shown that even when women earn more than their male partner, they’re still more likely to be the one to reduce their working hours to provide childcare.
But going part-time to provide childcare may not be a necessity for much longer. This year’s Spring Budget announced that, from September 2025, all working parents in England with children aged from nine months will be able to access 30 hours of free childcare a week. This could potentially make a big difference to those who want to stay in full-time work. Keep in mind that Wales, Scotland and Northern Ireland have their own approaches to childcare.
Want to know more about the gender pension gap? Find out more and get some pension tips which could help women to make more of their money.
You can consider your retirement as a household
If you have a partner, it could make sense for you to think about your retirement plans as a household, rather than individually. It could reduce the impact of part-time working on your retirement income.
If you want to start planning as a pair, start by looking at the Retirement Living Standards. They can give you an idea of how much you might need as a couple to achieve a minimum, moderate or comfortable lifestyle in retirement.
Did you know you can pay into someone else’s pension plan? If you find it works for you, you might consider if your partner could pay into your pension plan on your behalf.
How to find out if you’re on track
It's a good idea to regularly check up on your pension progress to see whether you're on track to meet your goals. If you use the Retirement Living Standards as a guide for how much you might need, it could help you to understand what steps you may need to take to achieve the lifestyle you want in retirement.
The information here is based on our understanding in May 2023 and shouldn’t be taken as financial advice.
Standard Life accepts no responsibility for information on external websites. These are provided for general information.