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£9bn babies as mums lose on out pensions

Mothers are losing up to £9bn in pension funds by having babies, claims Axa.

Its research shows that having a baby can slash a woman&#39s pension fund by around £65,000 if she stops contributions for five years. This could mean a reduction in pension income of around £4,000 a year by age 65.

Axa warns that new legislation from April 6 will worsen the problem as maternity leave will be extended to 26 weeks with pay up to £100 a week.

The company says parents should give more consideration to their retirement planning if they stop work for a period of time to look after their children. It recommends opting for a stakeholder which allows them to stop and start making contributions easily without penalties.

Head of pensions marketing Steve Folkard says: “Many women have pension funds while they are at work but stop contributions when they have babies and young children. This is costing them thousands when they come to retire. With stakeholder, retirement funding should not be as adversely affected by having a baby as it might have been a few years ago. Through a stakeholder pension for example, if you are not working, your partner can pay up to £3,600 a year into a fund.”

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