Work­ers may throw away their pen­sion

Yorkshire Post - Business - - BUSINESS -

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.

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