Auto-enrolment pension increases

The new tax year has seen the pension contribution for workers in auto-enrolled pensions rise from a minumum of 1% of their income to a minimum of 3%. Whilst this will of course reduce the amount in their pay packets, as an IFA I welcome this increase.

I meet many prospective clients coming up to retirement, or already retired, who simply haven’t saved enough during their working lives and who have very unrealistic expectations about the type of retirement they will be able to afford. Not only haven’t they saved enough, what they have saved hasn’t been managed to achieve the best returns. So the sooner you start saving, and managing those savings properly, the more comfortable the retirement you can expect.

Plus, it’s not just worker’s contributions that have increased, employers’ contributions are now a minimum 2% of the employee’s income, with many choosing to pay above the minimum amount as a way of attracting and retaining the best employees.