People have been advised to make better use of their Bank Holidays – a tip that could see them £3,000 richer in retirement. A clever Bank Holiday pension ‘trick’ could boost your retirement fund by £3,100 if you’re auto-enrolled into a workplace pension scheme.
An employee earning £26,000 would see their employer contribute roughly £37 a year across the nine bank holidays as part of the scheme, according to research by Lloyds Bank and Scottish Widows. The study explains that if someone is enrolled into a workplace pension scheme from the age of 22, and they retire at 68, this would accumulate to an extra £3,100 in your pension pot.
Since 2018, all employers are legally required to establish and enrol all eligible employees into a qualifying pension. Your employer will detail, in writing, exactly how automatic enrolment will impact you.
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In many instances, this will be done via letter, but some employers may use other methods, such as email.
Robert Cochran, retirement guru at Scottish Widows, has dished out some savvy advice for those looking to secure their future finances. He said: “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.”, reports Birmingham Live.
To be eligible for this financial wizardry, you’ve got to tick a few boxes. You need to be working or usually work in the UK under an employment contract (that means you’re an employee, not a self-employed contractor), or you must be contracted to personally provide work and services (no subcontracting your duties to anyone else, please).
And there’s more – you shouldn’t already have your mitts on a qualifying workplace pension, be at least 22 years young but still shy of hitting State Pension age, and rake in more than the earnings trigger, which is a tidy sum of £10,000 for the tax year 2024/25.