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People have been advised to make better use of their Bank Holidays – a tip that could potentially add £3,000 to their retirement funds.
A clever ‘hack’ involving Bank Holiday pensions could see your retirement pot boosted by £3,100 if you’re auto-enrolled into a workplace pension scheme.
According to research conducted by Lloyds Bank and Scottish Widows, an employee earning £26,000 could see their employer contribute approximately £37 annually across the nine bank holidays as part of the scheme.
The study suggests that if someone is enrolled into a workplace pension scheme from the age of 22 and retires at 68, this could result in an additional £3,100 in their pension pot.
Since 2018, it has been a legal requirement for all employers to establish and enrol all eligible employees into a qualifying pension. Your employer will provide written details explaining how automatic enrolment will impact you, reports Birmingham Live.
This is typically done via letter, but some employers may opt for other methods such as email.
Robert Cochran, retirement expert at Scottish Widows, emphasised the benefits of workplace pensions, stating: “Saving into a workplace pension is a real no brainer as it is the most tax efficient way to save for the long term, and the advantages of your employer contributing towards your pension are well worth it.
“A pound saved into a workplace pension can double from day one thanks to employer contributions, compound interest and tax relief, so while it’s never too late to start saving, a pound saved by someone in their twenties can bring four times as much buying power as a pound saved by someone in their fifties.”
To be eligible for a workplace pension, an employee must work or ordinarily work in the UK under a contract of employment, not already be in a qualifying workplace pension scheme, be at least 22 years old but below State Pension age, and earn above the earnings trigger, which is set at £10,000 for the tax year 2024/25.
