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Pensions
Pensions, national Insurance and investments are not exactly be the most enviable of errands to do before you go away like the seeing the dentist. However, they are important aspects to arrange before packing your suitcase.
Pensions
Due to the ensuing pension crisis, and the prospect of the pension age increasing up to 70 by 2020, in the UK. The prospect of a career break is definitely beginning to gather greater appeal for those who had previously planned to see the world when they retired.
However, the changing position of the state pension, and the increasing importance that the government are attaching to personal pensions, which are started early, makes the task of examining your pension prior to departure as important as picking up your anti-malarial drugs.
If you’re having a break from work, and your pension is tied to your final salary and the number of years that you’ve worked for the company, then it’s important to have a thorough discussion with your work about the effect your career break will have on your pension. It’s likely that you’ll have to negotiate pretty hard to secure the same pension deal when you return from your break. However, with the changing approach that many companies have towards caree rbreaks, it’s seems that the taboo of taking time-out is beginning slowly to change, and with that the effect of it on your pension.
If you possess a personal pension, then the situation is not so opaque, as it’s likely that you’ll be able to pay more in prior to departure, to cover for the period while you’re away when you will not contribute to it, and also when you return – similar to a flexible mortgage. However, it’s worth noting that some of the older scheme’s do impose penalties for this luxury, but its best to speak to the company you hold your pension with to make sure.
Due to the variety of pensions that we all hold, the situation tends to be different from one person to the next, however, the one thing we should have in common is the realization that we must discuss the issue with the pension provider prior to going away. Check out the ‘negotiator piece’ to see how you can show your bosses the benefits of a break; if they can see its more than just a holiday, its more likely they’ll be more lenient with regards to pensions.
National Insurance
Like a rainy day, National Insurance fails to inspire most. But regardless of this it is important to make sure your contributions are maintained, so that you’ll be eligible for a state pension, and any state benefits. If you’re definitely going away for less than a year then the issue is not of too much relevance provided that you’ve contributed for 90% of your working life. On the other hand, if you intend to be away for more than a year its best to make voluntary contributions while you’re away, to make sure you are covered. For more detailed information on national insurance voluntary contributions check out www.direct.gov.uk and follow the links to National Insurance.
Investment’s
Like a bungee jumps, investment also go up and down, for this reason it’s imperative to pay a thought to your investments before departure. It’s more than likely that while you’re away, you won’t always have access to the economist, FT or internet to hand, and for that reason it’ll be difficult to track investments. Thus while ‘breaking’ it may be prudent to move your shares into more stabile investments, to stop any volatile changes in the market affecting your interests, when your in a position to nothing about them.
Important: the suggestions given here by the Career Break Cafe are purely to make you think about your options, and it is up to you to make your own decisions. For a more informed financial response it is worth discussing your career break with a financial adviser. The Career Break Cafe holds no liability for the suggestions it has put forward with regards to finances.
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