The years with young children are among the tightest periods for a family budget – and this is exactly when the question tends to come up: what should happen to the pension savings? Suspend it? Resize it? The right answer typically isn't giving it up, but rearranging it – and the structure offers several tools for that.
- Alongside GYED/GYES, your personal-income-tax base changes – and so does whether the tax credit can be applied: rethinking the family's roles is a key question at this point.
- Temporarily reducing or suspending the premium is a better path than surrendering the policy – the policy stays alive.
- The key is the return plan: an increase after the pause, and making up the allowance with ad-hoc top-up payments.
What changes in the baby years?
Two things change: available income and the personal-income-tax picture. GYED (Hungary's earnings-related childcare benefit) is taxable income, but since 1 July 2025 a separate tax-base allowance (covering CSED, GYED and the adoption fee) has exempted it from personal income tax – on top of which comes the exemption for mothers of three children (from 1 October 2025), while the exemption for mothers of two children is being phased in by age group from 2026 (in 2026, for those under 40). In the years with young children there is therefore often no personal income tax paid for the pension insurance credit to apply against; it's worth checking against the rules in force. It can happen that the 20% is formally due, but there's nothing left to credit it against. It's worth clarifying the exact picture – how GYED/GYES (Hungary's earnings-related and flat-rate childcare benefits), the family tax allowance, and any other income combine – with your accountant or with NAV's guidance.
That's why, in the years with young children, rearranging family roles is the main tool: if the other parent's personal income tax is stable, it's worth considering who should be the policyholder – and in whose allowance the tax credit should work (our article on family policies).
Resizing the premium – without guilt
A reduced income calls for a reduced premium: premium reduction or a temporary premium holiday is a release valve built exactly for this situation (effects and the right order). The policy stays alive and past tax credits aren't affected – unlike surrender, which would be the most expensive 'solution.'
If your policy includes a premium waiver rider, check its conditions – on some products it can extend to specific life situations; this varies by product and is worth clarifying in advance.
The return plan
The baby years are temporary – the pension plan isn't. A good scenario fixes in advance when and in what steps the premium returns to its previous level, and how the skipped allowance can be made up. Ad-hoc top-up payments are your friend here: in the first good years after your return, the allowance can once again be used in full (our article on the allowance).
And one quiet point: a child's arrival is also a natural moment to review the beneficiary designation and the insurance elements (updating the designation).
The family's pension balance
The pension lesson of the years with young children applies at the family level: the two parents' pension goals form a single system. The years the at-home parent spends also count differently on the state pension side – which is when your own leg takes on extra importance, possibly with the other parent taking on the policyholder role.
It's worth putting this together at the family level – two people, one plan. Book a joint 20 minutes →
A question about your own situation? Book a free 20-minute consultation →
