You may be saving for retirement without realising it. Here's how to check
Summary
Many workers in the UK may already be saving for retirement without realizing it through an automatic pension scheme. This system takes a part of their wages into a pension pot, with extra contributions from their employer, helping them have more money when they retire.Key Facts
- Workers aged 22 or over earning more than £10,000 a year are usually automatically enrolled in a pension scheme.
- About 5% of a worker’s salary goes into their pension pot, separate from the state pension.
- Employers add at least 3% more of the worker’s wages to the pension pot.
- If workers don’t save into the pension, that money will be taxed and they will lose part of it.
- Workers earning between £6,240 and £10,000 a year can join the pension scheme if they choose, and their employer must contribute.
- People with multiple low-paying jobs under £10,000 each are not automatically included and should check their pension options.
- Under-22s are not currently included in the automatic scheme, but the government is thinking about lowering the age to 18.
- Women may benefit from starting pension savings early because they often take breaks from work for family care.
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