Pensions and National Insurance Credits on Maternity Leave: What Keeps Building Up and What Can Pause (UK)

A first baby prompts plenty of money planning, and it is easy to overlook the long-term items: the workplace pension and the State Pension record. The good news in GOV.UK’s guidance is that a period of maternity leave does not have to leave a gap in either. This guide explains what continues automatically, what may pause and where National Insurance credits fit. The workplace pension and leave rules described apply to employees in Great Britain, and National Insurance credits are a UK-wide system run by HMRC. It is general information, not financial advice.

Workplace pension on paid maternity leave

GOV.UK’s guide to workplace pensions explains that during paid leave, both the employee and employer carry on making pension contributions. The employee’s contribution is based on the actual pay received during the leave, while the employer pays contributions based on the salary the employee would have received if they were not on leave. On maternity leave specifically, GOV.UK says the employee and employer will continue to make pension contributions if the employee is getting paid during maternity leave.

That distinction can matter for the household budget. Statutory Maternity Pay is lower than a normal salary for much of the leave, so the employee’s own contribution is calculated on the lower figure, while the employer’s share is still calculated on the normal salary.

What if the leave is unpaid

GOV.UK states that if an employee is not getting paid, the employer still has to make pension contributions in the first 26 weeks of leave, which is Ordinary Maternity Leave. The employer has to carry on making contributions afterwards if it is in the contract, so the employer’s maternity policy is worth checking. GOV.UK adds that during unpaid leave an employee may be able to make contributions if they want to, and suggests checking with the employer or the pension scheme provider.

GOV.UK’s guide to employee rights on leave adds a general point: pension contributions usually stop if a period of leave is unpaid, unless the contract says otherwise, for example during unpaid periods of maternity leave. The two statements fit together, with the first 26 weeks of Ordinary Maternity Leave treated separately from any later unpaid period.

National Insurance credits and the State Pension

GOV.UK explains that National Insurance credits fill gaps in a National Insurance record, to make sure a person qualifies for certain benefits including the State Pension. Class 1 credits count towards the State Pension and may help with some other benefits, while Class 3 credits count towards the State Pension only. GOV.UK’s eligibility page lists what applies around leave:

• Maternity Allowance: Class 1 credits are received automatically.
• Statutory Maternity Pay, Adoption Pay or Shared Parental Pay with earnings too low to make a qualifying year: the person can apply for Class 1 credits by writing to HMRC with their National Insurance number and the period and reason.
• Registered for Child Benefit for a child under 12, even if not receiving it: Class 3 credits are received automatically, for the period on or after 6 April 2010.

The site’s guide to claiming Child Benefit for a new baby explains the claim itself, and its Maternity Allowance guide covers that payment.

Transferring credits between partners

GOV.UK’s overview states that credits received from registering for Child Benefit can be transferred to a spouse or partner who lives with the person, provided the person transferring has paid a year’s National Insurance contributions, known as a qualifying year. The eligibility page adds that a person can apply to transfer Class 3 credits from a spouse or partner who got Child Benefit for a child under 12. This can help when one parent is at home for longer.

Checking the record

GOV.UK advises checking the National Insurance record for gaps and says that a person who applied for credits that are wrong on the record should contact the office where they applied. A decision about credits can be challenged by asking for mandatory reconsideration.

A short checklist before leave starts

• Read the employer’s maternity policy for pension contributions after week 26.
• Ask the pension provider whether topping up during unpaid leave is possible.
• Register for Child Benefit even if the high income charge may apply, since GOV.UK links the credits to registration, not payment.
• Check the National Insurance record for gaps after the leave.

Frequently asked questions

Do I lose pension contributions during paid maternity leave? According to GOV.UK, contributions continue during paid leave, with the employee’s share based on actual pay and the employer’s on the salary that would have been received.

Do I get National Insurance credits on Statutory Maternity Pay? GOV.UK says people on Statutory Maternity Pay who do not earn enough to make a qualifying year can apply for Class 1 credits.

Do I need to receive Child Benefit to get credits? No. GOV.UK says a parent registered for Child Benefit for a child under 12 gets Class 3 credits automatically, even if they do not receive it.

The bottom line

A workplace pension keeps being paid into during paid maternity leave and, according to GOV.UK, the employer must continue in the first 26 weeks even if the leave is unpaid. National Insurance credits protect the State Pension record through Maternity Allowance, an application for Statutory Maternity Pay, or registering for Child Benefit. Reading the employer’s policy and checking the record afterwards completes the picture.

Sources

• GOV.UK, "Workplace pensions: Changing jobs and taking leave"
• GOV.UK, "Employee rights when taking maternity and other types of parental leave"
• GOV.UK, "National Insurance credits: Overview"
• GOV.UK, "National Insurance credits: Eligibility"