Are You Missing Out On Pension Top Ups?

New research shows that millions of UK workers are missing out on “top-ups” that could boost the value of their pension when they come to cash it in. A lot of larger companies will match the amounts their employees pay into their pensions when those employees save more. This could add hundreds or even thousands of pounds to the final value of the pension when the employee gets to retirement age.

The BBC reports

Royal London said that many workers were unaware of the option, and failed to take advantage… Despite having to make a number of assumptions in calculations, Royal London has estimated that an estimated £2bn of employer pension contributions would be available if workers took up the option of saving to a maximum rather than minimum level… It estimated that 3.2 million workers could receive an extra £650 per year each… That would mean somebody on average earnings who chose to take up an additional 3% matched contribution to their pension pot would receive a retirement income of £22,500 rather than £19,050, thanks to the extra contribution and tax relief… The Nationwide Building Society has changed its default level to a maximum, rather than a minimum contribution. Steve Webb, a former pensions minister and now director of policy and Royal London, said more could be done to make workers at other businesses aware that their employer might add to their pension if they were willing to contribute at a higher level.”