It’s never too late to save so don’t throw it all away

BRITAIN’S over-60s are throwing away billions of pounds and making their retirements harder by opting out of their workplace pensions at a higher rate than the rest of the population.

Millions of employees have received a workplace pension for the first time through the auto-enrolment scheme, in what is a rare pension success story.

So far, only around 10 per cent have opted out of their employer’s scheme, measured across all age groups.

However, opt-out rates for the over 60s are significantly higher, with almost one in four deciding to pull out of their scheme, according to the latest analysis from mutual insurer Royal London.

Its figures are in line with other auto-enrolment providers and it is warning that those who opt out could be losing more than they realise. Royal London’s figures show that a 60-year-old earning an average wage could amass another £14,000 of pension by age 65.

Under auto-enrolment, workers contribute 4 per cent of income, the employer 3 per cent and tax relief adds 1 per cent, lifting the total contribution to 8 per cent of earnings.

By opting out, workers are effectively turning down free money from their employer and the taxman.

Pension specialist Helen Morrissey said 250,000 could be losing £1.75billion in total.

“Someone at the age of 60 might think it is too late to save enough to make a difference to their retirement income but they are wrong.

“We would urge anyone thinking of opting out of their auto-enrolment scheme to think twice before actually doing so.”