Three out of four workers are on track to miss out on a moderate standard of living in later life, a recent report found. But many of those people may already be saving for retirement without even knowing it.
Most employees aged 22 and over who earn more than £10,000 a year – or £192 a week or £833 a month – should automatically see part of their wages diverted into a pension pot. This system, called automatic enrolment, means 5% of salary goes into a separate pension savings pot, on top of any state pension they will eventually receive.
“Three-quarters of workers face missing out on a moderate retirement standard, but many are already auto-enrolled without knowing.”
If that money is not put into a pension, it will be taxed – so workers lose some of it anyway. Crucially, their employer then adds the equivalent of at least 3% of wages into the pot. That is free money that can only be accessed in retirement.
For those who find money tight, opting out is possible – but the more saved and invested now, the more it grows over time, data shows. Experts say a simple check can ensure no one misses out on this free employer contribution. The independent MoneyHelper website offers more details on the system.
The message is clear: most workers are already enrolled without realising, and doing nothing means letting free money slip away.