Workers may throw away their pension
PEOPLE WHO choose to opt out of workplace pension saving could be “throwing away” a potential £450,000 pot by the time they retire, an insurer has calculated.
Aegon made the calculation ahead of an increase in minimum contribution rates into workplace pensions set to come into force in April, with concerns some savers may choose to drop out. The landmark automatic enrolment scheme has so far been seen as a success with nine in 10 people staying in their workplace pension rather than opting out.
From April 6, minimum contributions will increase from a 2 per cent total including employee and staff contributions to a combined 5 per cent, with a minimum of 2 per cent from the employer and the remaining 3 per cent from staff.
In 2019 the rate will increase again to 8 per cent.