People are being encouraged to maximise their Bank Holidays, a strategy that could potentially enhance their retirement fund by £3,000.
A clever Bank Holiday pension ‘trick’ could result in those automatically enrolled into a workplace pension scheme gaining an additional £3,100 in their retirement pot.
Research carried out by Lloyds Bank and Scottish Widows reveals that an employee earning £26,000 could anticipate their employer contributing roughly £37 annually across the nine bank holidays as part of the scheme, Birmingham Live reports.
The study further explains that if a person is enrolled into a workplace pension scheme from the age of 22 and retires at 68, this could accumulate to an extra £3,100 in their pension pot.
Since 2018, it has been a legal obligation for all employers to establish and enrol all eligible employees into a qualifying pension. Your employer will provide written details outlining how automatic enrolment will impact you.
In many instances, this information will be communicated via letter, but some employers may choose other methods, such as email.
Robert Cochran, the retirement expert from Scottish Widows, has dished out some golden advice for those looking to bolster their financial security.
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.”
To be in with a chance of reaping these bountiful benefits, there are a few boxes you need to tick. You must be an employee, not a self-employed contractor, working or usually working in the UK under a contract of employment, or contracted to personally perform work or services (no substitutes allowed).
Additional requirements include not already being in a qualifying workplace pension scheme, being at least 22 years old but below State Pension age, and earning above the income threshold which currently sits at a handsome £10,000 for the tax year 2024/25.
