More than three-quarters of workers are set to miss out on a moderate standard of living in later life, a recent report suggested. But many may already be saving for retirement without realising it — and missing out on free money from their employer.
Most workers aged 22 and over, earning more than £10,000 a year (£192 a week or £833 a month) should automatically see some of their wages transferred to pension savings. If you have no idea whether that includes you, experts say: usually 5% of your salary will go into a pension savings pot — an additional pot separate from the state pension.
“More than three-quarters of workers may miss out on a moderate retirement income, but many are already saving automatically without knowing.”
If you don't put this money into a pension, it will be taxed, so you will lose some of it anyway. Crucially, your employer will then add money into the pot, in most cases the equivalent of at least 3% of your wages. This is money you can only access in retirement, so if money is really tight you can opt out and have the money in your wages now.
But the more money saved and invested now, the more it will grow over time, data shows. A simple check could ensure you are not missing out on free money which could help in later life. You can read more about the automatic enrolment system on the independent MoneyHelper website.