Pensions and cancer
If you are affected by cancer, you might be thinking about your pension options.
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What is a pension?
A pension is a type of long-term savings plan to help you save money for later life. You pay into it while you work to give you an income for when you work less or retire.
The State Pension is a regular payment from the government most people can claim when they reach State Pension age.
What are the different types of pensions?
You may find it useful to think about your pension options when you have cancer. There are 3 main types of pensions:
- State Pension
- personal pensions
- workplace pensions.
State Pension
The State Pension is a regular payment from the government most people can claim when they reach State Pension age.
Your State Pension age can be different to others because it depends on the year you were born.
You can check your State Pension age online at:
- gov.uk for England, Scotland and Wales
- nidirect.gov.uk for Northern Ireland.
Or you can call the Future Pension Centre on 0800 731 0175 or textphone 0800 731 0176.
If you retire early because of a medical condition, you still have to wait until State Pension age to claim your State Pension. You can read more about this at gov.uk or nidirect.gov.uk for Northern Ireland.
Personal pensions
Personal pensions are usually set up by you, sometimes with the help of a financial adviser. This is a specialist who is legally allowed to give you recommendations about buying financial products.
The money you pay into a personal pension gets invested to build up a pot of money for when you retire. You can usually choose when and how much you want to pay in.
Workplace pensions
Workplace pensions are arranged by your employer. Employers must provide a pension for employees who earn over £10,000 and are between the ages of 22 and State Pension age. There are 2 types of workplace pensions:
- Defined contribution schemes are where you gradually build up money over time. If your employer has arranged the pension, they will add payments as well as you.
- Defined benefit schemes are where your employer promises to pay you an agreed amount when you retire. The amount is based on how long you have worked there. It is also based on your final salary or your average salary from the time you have worked there.
What happens if I take time off work?
You may not know how cancer will affect your working life. Some people stop working when they have cancer. Others carry on working but with reasonable adjustments to support them. They may take time off when they need to, or they may work fewer hours.
If you are employed and use your leave to take time off, your pension is not affected.
Your pension can be affected by taking time off without leave. It can be affected by the following.
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Sick pay
If you are getting sick pay, you can often carry on paying into your pension as before. But not all employers allow this. It depends on their sick pay scheme. Employers must pay Statutory Sick Pay (SSP) for up to 28 weeks by law.
Agricultural workers, such as farm workers, get Agricultural Sick Pay (ASP). SSP may not pay you enough to cover your pension contributions. Employers may offer sick pay in addition to SSP. This is called occupational or company sick pay.
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Working reduced hours
If you reduce your working hours and get paid less, it will probably reduce your pension payments.
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Stopping work
If you stop working and stop your pension contributions, your predicted final pension amount will be lower than before.
What happens to your pension will depend on your employment contract and pension scheme. Some pension schemes come with benefits that can help you carry on making pension contributions.
To find out how your pension might be affected by changes to your work situation, you can talk to your:
- employer
- human resources (HR) department at work
- pension scheme manager.
Pension insurance
Some people buy insurance that keeps making pension contributions if they cannot work. You usually need to buy the insurance when you start the pension scheme. You can ask your pension provider if you are not sure. This type of insurance is sometimes called:
- pension-contribution protection benefit
- waiver of contribution benefit
- waiver of premium benefit.
Your employer may also give you income protection. This might mean that your salary is still paid even if you cannot work.
Can I get my pension early if I have cancer?
If you have or have had cancer, you may be able to retire from work and get your personal or workplace pension early. But this can depend on the rules of your pension scheme or employer.
Many workplace pension schemes will provide you with an ill health pension if you are unable to work. Some schemes may let you get your pension early if you are unable to do your current role, rather than being unable to do any type of work.
We have more information about getting your pension early.
What happens to my pension when I die?
People who get your money or possessions when you die are called your beneficiaries. When you die, pension money usually goes to your beneficiaries. You usually tell your pension provider who you want your beneficiaries to be. But your provider might state that beneficiaries are the people that depend on you when it comes to money. They are called your dependants.
If you die before taking any of your pension, your chosen beneficiaries could get regular payments (an income) or bigger payments called lump sums.
If you die after starting to take your pension, your beneficiaries inherit any lump sums you took from the pension and did not spend. They may have to pay inheritance tax on that amount. There may also be lump sums or income paid to your beneficiaries after you die.
We have more information about passing on your pension.
What is Pension Credit?
Pension Credit is money paid to you if you are over State Pension age and have a low income. It is separate to your State Pension.
Pension Credit is means-tested. This means you are eligible for it if your income is below a certain level.
If you are eligible for Pension Credit, you can also get other benefits. You can also get help with housing costs such as rent or mortgage payments.
We have more information about Pension Credit and other benefits.
Who can I talk to about cancer and pensions?
MoneyHelper, Citizens Advice and NI Direct give free guidance about pensions. They can also refer you to a free government scheme called Pension Wise. This scheme offers extra guidance and support if you:
- are aged 50 or over
- have a UK-based defined contribution pension scheme – either a personal or workplace pension.
Financial advice
Independent, professional financial advisers are legally allowed to give you recommendations about buying financial products. They usually charge a fee for their services.
You can find a financial adviser by asking people you know for a recommendation, or by visiting the following websites:
Always make sure the financial adviser is authorised by the Financial Services Register. Some financial advisers are linked to pension providers. Try to choose a financial adviser who is independent.
Making a complaint
If you are unhappy about service you get from a financial adviser or pension provider, you can contact them to make a complaint.
We have more information about making a complaint.
About our information
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References
Below is a sample of the sources used in our pensions and cancer information. If you would like more information about the sources we use, please contact us at cancerinformationteam@macmillan.org.uk
MoneyHelper. What is a pension scheme? Available at: www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/what-is-a-pension-scheme (accessed March 2023)
GOV.UK. www.gov.uk/pension-types (accessed March 2023)
nidirect www.nidirect.gov.uk/articles/types-workplace-pension-schemes (accessed March 2023)
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Reviewers
This information has been written, revised and edited by Macmillan Cancer Support’s Cancer Information Development team. It has been reviewed by expert medical and health professionals and people living with cancer. It has been approved by Amanda South, Service Manager – Financial Guidance Team.
Our cancer information has been awarded the PIF TICK. Created by the Patient Information Forum, this quality mark shows we meet PIF’s 10 criteria for trustworthy health information.
The language we use
We want everyone affected by cancer to feel our information is written for them.
We want our information to be as clear as possible. To do this, we try to:
- use plain English
- explain medical words
- use short sentences
- use illustrations to explain text
- structure the information clearly
- make sure important points are clear.
We use gender-inclusive language and talk to our readers as ‘you’ so that everyone feels included. Where clinically necessary we use the terms ‘men’ and ‘women’ or ‘male’ and ‘female’. For example, we do so when talking about parts of the body or mentioning statistics or research about who is affected.
You can read more about how we produce our information here.
Date reviewed
Our cancer information meets the PIF TICK quality mark.
This means it is easy to use, up-to-date and based on the latest evidence. Learn more about how we produce our information.
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