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One in four don’t know how much is going into their workplace pension. Finding out how much you and your employer pay in could make a big difference to your retirement plans.
This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.
Many of us have no idea how much we and our employers are putting into our workplace pensions.
Those over 55 are the most likely to be unaware, with almost two in five saying they don’t know how much is going into their workplace pension. Women were also more likely to say they were unaware (almost one in three) compared to men (one in five)*.
This is likely due to auto-enrolment. It’s easy to be set up with a pension by your employer and just let the money go in from each pay cheque.
But the risk of not paying attention could leave you with a nasty shock later if you discover you’re too far from funding the retirement you hoped for.
Here’s how to find out what you and your employer are paying into your pension. Plus, ways to boost your retirement savings.
This article isn’t personal advice. If you’re not sure what’s right for you, please ask for financial advice. Typically, you can’t access your personal or workplace pension until you’re 55 (rising to 57 in 2028).
*Survey of 989 people carried out by Opinium on behalf of HL in September 2023.
Pensions are an important employee benefit, and employer contributions can make a huge difference to how much you end up with. It’s a good idea to find out how much you’re contributing and how that affects what your employer pays in.
Some employers stick to auto-enrolment minimum contributions (3% of any qualifying earnings), but others are willing to do more and if you’re able to put extra into your pension, then so will they. This is known as employer matching.
Once you’ve found out how much you’re paying in, you can also take a look at if you can afford to pay in more. Even adding an extra 1% could make a big difference over time. Especially if your employer will match it.
Use our online pension calculator to see how much you could end up with and the potential impact of boosting your contributions.
If you’re a higher-rate taxpayer, it’s also worth checking how much you’re paying in and use this when you’re filling in your tax return. This way you can claim any further pension tax relief.
Our research shows almost one in five higher-rate taxpayers have between £401 and £500 each month going into their pension from their own pockets and their employers. This compares to just one in 20 basic-rate taxpayers.
Higher-rate taxpayers are also more likely than basic-rate taxpayers to know what they’re contributing. That’s possibly because of the larger sums involved and the need to claim further tax relief (i.e. above basic rate) on personal contributions.
Don’t just make this a one-off check. Revisit your contributions periodically to see if you can increase them. Especially when your circumstances change, like if you get a pay rise or have a drop in outgoings.
Regular check-ins with your pension can help you plan ahead with more confidence. If you leave it too late to find out how much you’re paying in, then you could find you’re some way off track with little time left to make up lost ground.
There’s more to your pension than just how much you’re putting in. Checking in on your pension investments, nominating a beneficiary and considering consolidating your pensions can all help you meet your retirement goals.
For more pension planning tips, explore our pension checklist.
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