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Tuesday 16 September 2014

Stay-at-home mums lose out on pensions

Published 05/01/2014 | 02:30

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WORKING MUMS: Losing out on pension entitlements
WORKING MUMS: Losing out on pension entitlements

Stay-at-home mums are losing out on €100,000s of pension benefits, according to Dublin pension firm, Independent Trustee Company (ITC).

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"Women are more likely to take time out of paid employment to manage child-rearing," said Aidan McLoughlin, managing director of ITC. "This reduces their chances to fund their pension."

For example, if a woman leaves work for 10 years to rear children, she could lose out on €350,000 worth of pension benefits, according to McLoughlin.

Women who decide to become stay-at-home mums could make up for this shortfall by paying more into their pension before they leave work to rear their children -- or after they return. However, the current tax system works against them, according to the ITC, which is calling on the Government to change the way tax relief is paid on pensions.

You can pay between 15 and 40 per cent of your earnings into your pension and get tax relief on those contributions, depending on your age. The limit on the amount of tax relief you can get should apply to the contributions made to a pension over one's lifetime -- rather than over each year as is currently the case, according to ITC.

A lifetime limit would help women to make up for the pension contributions they could not make while at home looking after children -- if and when they return to work.

Don't blame a late tax return on your dead pet goldfish

IF YOU expect to run into difficulties paying your tax bill this year, don't rely on your bad back or the death of your pet goldfish to get you off the hook with the taxman. These are among the oddest excuses given in Britain for sending a late return, according to the British tax authority, HM Revenue and Customs (HMRC).

A working taxi driver said he filed late because a bad back stopped him from getting upstairs -- to where his tax return was. A self-employed builder said his pet goldfish had died.

A farmer blamed his tardy return on a run-in with a cow, while another man said he hadn't got around to paying his tax -- because he was on an around-the-world cruise.

The excuses didn't wash with HMRC.

Neither are they likely to do so with our own Revenue Commissioners, who could hit you with a penalty of between five and 10 per cent of the amount of tax owed if you're late filing your return.

Irish Independent

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