Mum's the word for pensions deadline

AS FAMILIES congregate to celebrate their mothers today, they might also reflect on how much she is worth not just in love but in financial terms. Mums save their families around £30,000 a year in unpaid work, according to Legal & General.

The least families should do is take care of her old age. And for thousands of women, there are just a few days left to beat the deadline for making sure she has a decent pension in retirement.

Mother's Day may be a time to celebrate with chocolate and flowers, but when Monday comes it will pay the whole family to give mum a helping hand financially.

We suggest ten ways to make a difference.

1. Take an urgent look at her state pension

The basic state pension is the most valuable slice of pension for most women, so it is important to qualify for a maximum payout through national insurance contributions or credits.

Women now only have to have accumulated 30 years of NI contributions or credits to qualify for a full state pension. Credits are available for years spent caring for children and elderly relatives.

Some women will still be left with gaps, particularly if they have regularly moved in and out of work so that they earned neither a full year's working contribution or caring credit.

It is possible to fill in gaps in your record by making extra voluntary contributions for up to the previous six years. To find out whether you have gaps, every woman should regularly conduct a pensions forecast, which can be done online at www.thepensionservice.gov.uk, or by calling 0845 3000 168.

However, a special opportunity to plug even bigger gaps is running out this week. Women who either have already or will retire between April 2008 and April 2015 can plug six extra years going back to 1975/6 provided they have at least 20 qualifying years, which can include credits for caring.

So if you reached state pension age on or after April 2008 and are not getting a full basic state pension (currently 97.65 a week) you may be able to top up your national insurance contributions to receive more money each week and you may get some arrears.

In fact, this applies not just to women born between 6 April 1948 and 5 October 1950 but also to men born between 6 April 1943 and 5 April 1946.

Tuesday is the deadline for making these payments, so if you want to fill any gaps, call 0845 604 2931 urgently.

The current rate of payback is 12.05 a week, or 626.60 each complete year. So it will cost 6,266 to buy back ten years, but if you retire after 2010 this could represent a third of your state pension.

The buy-back rate increases to 12.60 a week from 6 April.

2. Separate bank accounts

Separate bank accounts can provide women with greater protection and security. In the event of death, most banks convert a joint account to a sole account in the name of the survivor. 3. Buying a home

Many young mums are not necessarily married to their partner. It is important they and the children are protected if the relationship breaks down.

Work out in advance what will happen to the home if you split. Reaching an agreement will improve security for all.

4. Put savings in her name

Many mums have no income of their own, or if they do work are likely to pay lower rates of tax than their partner, so it can make sense to put savings in her name. As well as saving tax, it gives her independent access to cash.

5. Open an Isa

Surprise mum with an Isa of her own. Individuals have a tax-free Isa allowance each year, which before April will permit 10,200 to be sheltered from tax, of which 5,100 can be deposited in cash with a bank or building society.

After April, the allowance will increase to 10,680, of which 5,340 can be saved on deposit.

6. Fill the insurance gap

Many men will have insurance as part of their employment package of benefit, but this applies to far fewer women, even where they work part-time.

On top of this, most families protect the earnings of the breadwinner, without thinking where the family would be left if anything happened to mum.

Unsurprisingly, women are seriously under-insured, according to a report from protection specialist Bright Grey. Nearly six out of ten have no life insurance, while more than 84 per cent, some 21 million women, do not hold a critical illness insurance policy.

Roger Edwards, proposition director at Bright Grey, said: "Nearly half of women are now the main household earner, so it is worrying to see a large number are leaving their families financially exposed."

Yet protecting their lives is surprisingly cheap, with 10 monthly buying 222,887.09 worth of cover for a 30-year-old for 25 years. The same premium buys critical illness cover of 30,913.95, also over 25 years.

7. Look after her health

Some men may have medical insurance, which would meet private healthcare costs, through their jobs. Sometimes, with a small additional premium, this could be extended to their partner or spouse.

8. Help her save for a pension

Most family pension saving is done in the name of the man, usually because he has access to better benefits from a company scheme, and also because he often pays tax at a higher rate and therefore qualifies for the highest tax rebate.

However, it is important to think not just about tax savings on the way in, but when pension is paid on the way out. As women have their own personal tax allowance, it does not necessarily make sense for all the pension to be in the husband's name.

Where a spouse does not work at all, a partner contributes 2,880 into a pension every tax year, potentially until age 75. Tax relief bumps up the payment to 3,600. A quarter of the fund can be taken at 55 tax-free.9. Protect her in retirement

Husbands reaching retirement today overwhelmingly make no provision for their wives in retirement. However, if the pensioned partner, usually the husband, dies prematurely, the wife can be left destitute.

Buying a survivor's pension for a spouse is expensive. 100,000 will buy a 65-year-old man 6,480 for himself. If he adds in a survivor's two-thirds pension for his wife, that falls to 5,880.

If he wants to protect his own pension against inflation, it reduces to 4,560. If he adds in an inflation-proofed pension for his wife as well, that falls further to 3,960.

10. Make a will

Making a will is one of the best ways to protect your wife if anything happens to you.

'I'm lucky to be part of a final salary deal'

Jane Yates with Beth and Eve. The mother-of-two says her final salary pension is not a benefit she would give up lightly. Photograph: Greg Macvean

Mother-of-two Jane Yates has always worked full-time, but she admits that if she ever decided to stay at home she would be very vulnerable.

Jane says: "All our financial security is based on both me and my husband working. If that stopped I would be incredibly vulnerable."

Even so, the family income was hit when Beth, now seven, and Eve, five, were born. Jane took maternity leave then went back to work full time. The children went into nursery, and now attend after-school club.

Jane says: "When you have small children, you aren't left a lot after working because nursery was so expensive. That said, afternoon club is not cheap either.

"I have always worked, and can't imagine what life would be like without that routine."

But most of Jane's financial security comes from her job with a Scottish insurance company. Having joined the company in 1994, she is a member of their final salary scheme, which has now closed to new members, but allows longer-term staff to continue accruing pension rights. She also has a life and critical illness policy.

She says: "I know how lucky I am to have a final salary pension, and what it is worth. It is not a benefit I would ever give up lightly. In fact it is a major factor when I look at other opportunities elsewhere."