More than three-quarters of workers are on course to miss out on a moderate standard of living in later life, according to a recent report. Yet many of them could already be saving for retirement without knowing it.
A simple check could reveal that you are one of them – and that you are missing out on free money from your employer. The key is automatic enrolment, a system that applies to most workers aged 22 and over who earn more than £10,000 a year (or £192 a week; or £833 a month).
“Over 75% of workers risk missing a moderate retirement, but many are already saving automatically without knowing.”
Under this system, 5% of your salary is moved into a separate pension pot – money you would lose to tax if it stayed in your wages. Crucially, your employer then adds at least another 3% of your wages. That is money you cannot touch until retirement, but if times are tight you can opt out and take the cash now.
“If you don’t put this money into a pension, it will be taxed, so you will lose some of it anyway,” experts point out. The more that is saved and invested now, the more it can grow over time.
The independent MoneyHelper website provides further details on the system. One check could be all it takes to secure a more comfortable future.