{"id":222891,"date":"2025-06-29T02:48:20","date_gmt":"2025-06-29T02:48:20","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/222891\/"},"modified":"2025-06-29T02:48:20","modified_gmt":"2025-06-29T02:48:20","slug":"pension-mistake-could-cost-people-40000-experts-warn-personal-finance-finance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/222891\/","title":{"rendered":"Pension mistake could cost people \u00a340,000, experts warn | Personal Finance | Finance"},"content":{"rendered":"

People who started their careers before 2012 were not automatically enrolled in their workplace pension<\/a> scheme, hence they were more likely to start saving for their retirement later in their careers. A recent report has highlighted how detrimental<\/a> this decision could be, cautioning people about delaying their automatic enrolment now.<\/p>\n

If you start work and saving for retirement at 22, your pension pot by the time you reach 68<\/a> will be approximately \u00a3210,000. However, if you delay this by just five years and only start saving at 27, you’ll be \u00a340,000 worse off with just \u00a3170,000 at 68.<\/p>\n

This is according to a new report by Standard Life, as seen by Money Week<\/a>. And the calculations just get worse the more you put off saving for retirement.<\/p>\n

If young workers only start saving into a workplace pension at 32, they’ll be looking at around \u00a3136,000 by the time they’re likely to qualify for state pension<\/a>.<\/p>\n

Delaying saving by 15 years will make them \u00a3103,000 worse off than someone who started saving at 22, proving that each moment counts when it comes to pension funds.<\/p>\n

These figures are based on an person starting employment with a \u00a325,000 starting salary at 22 and receiving a yearly pay increase of 3.5%. The experts also factor in a 5% personal pension contribution and a 3% employer contribution to a scheme yielding a 5% investment return.<\/p>\n

According to the Retirement Living Standards<\/a> report from PLSA, the least amount a sole individual requires for retirement is \u00a313,400 annually, covering only essential costs.<\/p>\n

To afford a more comfortable retirement, including UK holidays and occasional takeaways, a lone individual needs around \u00a331,700 every year.<\/p>\n

For a retirement that includes foreign travel, streaming services and new clothing, it’ll be approximately \u00a343,900 annually for one person.<\/p>\n

Effectively, young employees who do not contribute to their workplace pension for five years could lose out on three years of basic retirement income or almost an entire year of a comfortable retirement.<\/p>\n

Dean Butler, managing director for retail direct at Standard Life said: \u201cIf your finances permit and your circumstances allow, the sooner you engage with and begin to contribute to your pension, the better your ultimate retirement outcome could be.<\/p>\n

\u201cWhile delaying entry into the workforce, for instance to pursue further education, can offer long-term benefits, both financially and personally, it’s important to be mindful that this might require you to contribute more later on to meet your retirement goals.<\/p>\n

\u201cSimilarly, if you choose self-employment in your twenties, it’s worth opening a personal pension, as you won’t benefit from automatic enrolment via a workplace and could miss out on important early-career contributions.\u201d<\/p>\n

Automatic enrolment came into effect in October 2012 and its implementation in workplaces took place over several years.<\/p>\n

The policy makes it compulsory for employers to enrol eligible employees in a workplace pension and make contributions.<\/p>\n

To qualify, employees must be aged between 22 and state pension<\/a> age, with a pre-tax income of at least \u00a310,000, or a monthly income of \u00a3833, or a weekly income of \u00a3192.<\/p>\n","protected":false},"excerpt":{"rendered":"People who started their careers before 2012 were not automatically enrolled in their workplace pension scheme, hence they…\n","protected":false},"author":2,"featured_media":222892,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[67567,51,3374,474,2074,2094,2499,2250,3653,87972,16,15],"class_list":{"0":"post-222891","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-automatic-enrolment","9":"tag-business","10":"tag-employment","11":"tag-finance","12":"tag-pension","13":"tag-pension-savings","14":"tag-personal-finance","15":"tag-retirement","16":"tag-retirement-planning","17":"tag-standard-life-report","18":"tag-uk","19":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114764375974619346","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/222891","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=222891"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/222891\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/222892"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=222891"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=222891"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=222891"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}