More than three-quarters of workers are set to miss out on a moderate standard of living in later life, a recent report suggests. But a simple check could put you on a more comfortable path — and you may already be saving without realising it.
Most employees aged 22 and over who earn more than £10,000 a year — or £192 a week, or £833 a month — are automatically enrolled into a workplace pension. Under the system, 5% of salary goes into a separate pension pot, on top of any state pension you will eventually receive. Crucially, your employer then adds money equivalent to at least 3% of your wages. That is free money you can only access in retirement.
“Over 75% of workers face a retirement shortfall, but automatic enrolment means many are already saving without knowing.”
If you do not put that 5% into a pension, it will be taxed anyway, so you lose some of it. If money is really tight, you can opt out and have the cash in your wages now. But the more saved and invested now, the more it grows over time, data shows.
Kevin Peachey, the BBC's cost-of-living correspondent, noted that many people find it hard to put money aside. The independent MoneyHelper website offers more details on the automatic enrolment system.
One check — looking at your payslip or asking your employer — could ensure you are not missing out on that free money.