As a single parent, you’ll no doubt want to make sure you have enough money to take care of yourself and your children, no matter what happens. This page explains your options for helping to keep you and your family financially secure in the future.

Pensions

Life insurance

Wills

Power of attorney

Pensions help you save money in a tax-efficient way for your later years when you’re no longer working. The State Pension is linked to your National Insurance payments. You might also be able to pay into a workplace pension through your employer.  

The State Pension

You can claim a State Pension when you reach a certain age. This is a regular weekly payment from the government based on your National Insurance record. The latest State Pension is up to £185.15 a week (2022-23). 

At the moment, the age when you can start taking your State Pension is 66 for everyone. This is gradually going up to 68. You can check when you’ll be able to get your State Pension on gov.uk. You can also use the State Pension forecast to see how much you could get and how to increase it, if you can. 

Workplace pensions 

If you’re working, it’s a good idea to pay into a pension if you can possibly afford to, particularly if your employer will pay towards it too. A workplace pension is a type of long-term savings plan where your employer puts some of your salary each week or month. This gives you an income later on, when you want to work less or retire. 

How it works

There are several types of workplace pensions. The most common one is called a defined contribution scheme. Here are the basics:

• Your employer pays a percentage of your salary into your pension.
• You also pay a percentage into your pension (called a contribution).
• The government gives you back the tax you’ve already paid on your contribution, and this also goes into your pension.  
• You can choose to start taking your pension any time after you turn 55. You have a few different options as to how you can take the money at that point. 

Your employer has to keep paying towards your pension while you’re on maternity leave.  

Who can have a workplace pension?

All employers have to offer a workplace pension to their employees. You might not automatically be enrolled into it, so it’s helpful to understand the rules:  

• If you earn £10,000 or more and are at least 22 years old, you should be automatically enrolled (you can then opt out if you choose).
• If you earn between £6,240 and £10,000 you won’t be automatically enrolled, but you can ask to join. Your employer has to agree and to pay towards it, too. 
• If you earn less than £6,240, you can ask your employer to let you join the pension scheme. They have to say yes, but they don’t have to pay towards it.

You can also choose to set up your own pension plan. You can have as many personal pension plans as you like and use other tax-efficient savings plans, like an ISA.

If you die before you retire, the money in your pension can be paid to your children or other dependents. This might be paid as a lump sum or as a regular income, depending on the type of pension scheme you have. You should talk to your pension provider about this and make sure your children are named as your dependents for your pension.

You can get free guidance about pensions from MoneyHelper. They also have a service called Pension Wise for over 50s, where a pension specialist will explain your options for taking money from your pension pot.

It’s not easy to think about death, but knowing your children will be taken care of financially if the worst happens can bring you real peace of mind as a single parent. Life insurance pays a certain amount of money, normally as a lump sum, to your family when you die. 

It’s usually a substantial amount and can be used to support your children for several years. This can help to ease the financial burden of losing a parent.

How it works

You pay a monthly amount (a premium) for your life insurance. The cost of this varies, depending on the provider and things like your age, health and lifestyle. It also depends what you want it to cover, and how much you want it to pay out. For example, a 30-year-old non-smoker will pay a lower premium than a 40-year-old smoker. 

There are lots of different life insurance products around, including some cheaper options. Not all of these are reliable. It’s important to carefully read and understand the terms of the insurance policy, so you know what it does and doesn’t cover. 

Types of life insurance

There are 3 main types of life insurance policy:

1. Term life insurance – this runs for a fixed time, like 10 or 20 years. It only pays out if you die during this time.
2. Family income benefit – this is a kind of term life policy. After your death, it pays money to your family as a regular monthly income, rather than as one big payment.
3. Whole-of-life insurance – this covers you no matter when you die. It’s more expensive than term life insurance.

The Which guide to life insurance is a useful place for more information. It’s also a good idea to get financial advice before deciding what kind of life insurance you want to buy. You can find an adviser through unbiased.co.uk.

It’s really important to make a will as a single parent. This lets you say who should care for your children after you die. If you share parental responsibility with their other parent, they’ll continue to care for the children. But if you’re the only person with parental responsibility, you can use a will to appoint a guardian to look after your children. It also gives you the chance to decide what happens to your money, property and possessions after you die. 

Your will should set out:

• Who should look after any children under 18 (a guardian)
• Who you want to leave things to
• Who is going to sort out your home and possessions and make sure your will is followed after you die (called your executor)
• What happens if the people you want to leave things to die before you
• Any charity you’d like to leave money to

Before you make the will, you should make sure the people you’re naming as guardians are willing to take on this role. It’s also a good idea to choose more than one person in case your first choice isn’t able to step in when the time comes. 

Help with writing a will

It’s generally a good idea to use a solicitor to write your will, or to check a will you’ve written. It’s easy to make mistakes, and this can cause problems and cost money after you’re gone. 

But wills don’t have to be written or witnessed by a solicitor. Here are your main options if you don’t want or can’t afford to use a solicitor:

• Writing your own will: If you want to write your will yourself, you can. But it is important to make sure your will is legal, and you should only write it yourself if it’s really straightforward. For your will to be legal, it has to be signed by 2 witnesses over 18. You can read more about wills on gov.uk.
• Using a will-writing service: Just bear in mind that will-writing firms aren’t regulated by the Law Society, so quality can vary. It’s a good idea to search for a will-writing firm belonging to The Institute of Professional Willwriters. There are also online will-writing services that offer solicitor checking.
• Through your trade union: If you belong to a trade union, it might offer a free will writing service through its own solicitors. 
• Through a charity you support: Some charities offer their supporters free will-writing services through the National Free Wills Network. 

It’s important to think about who you’d like to make decisions on your behalf if you weren’t able to – for example, if you were unconscious in hospital after an accident or if you had a stroke. 

A lasting power of attorney (LPA) is a legal document that lets you name one or more people (known as attorneys) who can help you make decisions or make them on your behalf. There are 2 types of LPA:

1. Property and financial affairs 
2. Health and welfare

An LPA for property and financial affairs can be used, if you want, while you can still make and communicate your own decisions (known as having mental capacity). A health and welfare LPA can only be used when you no longer have mental capacity.

It’s important to set up an LPA in advance. It’s much harder and more expensive for someone to arrange to manage your money if you’ve already lost mental capacity.

You can find out more about making and registering an LPA on gov.uk.