Pensions and Special Circumstances

Just as you consider how your retirement would be affected by bereavement, consider the implications of other life changes on your retirement.

• What would you do if you got married? Would you stop working if you needed to care for children? How would this affect your pension?
• What would happen if your marriage ended in divorce? Would you be entitled to a share of your partner’s pension fund? Would they be entitled to a share of your savings? With so many marriages ending in divorce and so few couples choosing to sign prenuptial agreements, these questions are worth serious consideration.
• What would happen if you needed to unexpectedly provide for dependents, such as elderly relatives or grandchildren? Do you have a contingency fund to cope with these extra expenses should they occur? If not, how would this drain on your retirement income affect your overall retirement finances?
• What are the terms and conditions of your pension savings scheme in the event of redundancy? Are you entitled to withdraw your contributions early without paying a penalty? Are you allowed to suspend your pension contributions until you have more money available?
• What are the terms and conditions of your pension savings scheme in the event of a long-term illness or disability? Are you entitled to withdraw your contributions early without paying a penalty? Are you entitled to higher pension benefits when you begin withdrawing your pension? Some pension schemes offer their members increased benefits or higher lump sum payments when their life expectancy is reduced.

Keep your pension scheme provider informed of any changes to your situation. You may be entitled to higher pension benefits or special assistance if you find yourself in a difficult situation.

Just as you consider the effect of special circumstances on your retirement income, make sure that you have considered the effects of any planned lifestyle changes on your retirement income. If, for example, you plan to continue working part-time after you retire, but you hope to fully retire at eighty, then consider how your retirement income will be affected when you are no longer earning. Of course, it is only good common sense to consider all the eventualities and prepare yourself for every scenario. Nevertheless, it is easy to focus on the complexities of pension schemes and forget to consider the most important day to day aspects: how well will this scheme provide for you and your family?

For more detailed information on these themes, see State Pensions and Family, Non-State Pensions and Family and Pension Protection and Family.