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Not having children could double the value of a saver’s pension pot, analysis from Standard Life has revealed.
Standard Life’s calculations showed that someone who began working full-time with a salary of £25,000 per year and paid the minimum auto-enrolment contributions from the age of 22 could amass a total retirement fund of £208,000 at today’s prices by the age of 68, the expected state pension age for people born after 1977.
However, assuming an even split across 18 years, the £166,000 cost of raising a child over 18 years works out as £9,222 a year.
Assuming someone directed this additional £9,222 a year into their pension for 18 years, Standard Life found that they could add £226,000 to their pension, potentially amassing a total fund of £434,000 – more than double the value.
In addition to this, it found that even putting half this amount into a pension could lead to a "significant boost", as those with double income and no kids (Dinks) who put £4,611 into their pension could add £113,000 to their retirement fund at today’s prices, potentially building a pot of £321,000 at the age of 68.
The findings come as data showed the UK’s fertility rate recently hit a record low of 1.44 children per woman.
Standard Life’s managing director, Dean Butler, said that the rising cost of living and housing are vital reasons why many people choose to have fewer children.
“While a lower birthrate raises some worrying questions about the future of the state pension, with the likelihood of fewer people of working age supporting a greater number of retirees in years to come, there is perhaps the potential for a private pension boost," he continued.
“With this year’s resurgence of ‘Dinks’ on social media showcasing their time-rich lifestyle and how they’re choosing to spend their money, some might find themselves in the position to put a bit more away for the future.
“While they are likely to have a range of things they want to spend on in the short-term, channelling all or some into long-term savings could have a huge positive impact in later life.”
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