Consumer champion Martin Lewis has sounded the alarm for millions of UK workers who could be missing out on valuable pension contributions. The Money Saving Expert founder revealed that a common payroll error is leaving employees short-changed on their retirement savings.
In his latest money-saving bulletin, Lewis explained that many workers enrolled in workplace pension schemes might not be receiving the full employer contributions they're entitled to. The issue stems from how some companies calculate contributions based on "qualifying earnings" rather than total salary.
Who's Affected and How to Check
According to Lewis, the problem primarily affects employees earning between £6,240 and £50,270 annually. If your workplace pension uses the qualifying earnings model, you might be losing out on significant employer contributions.
The key warning signs include:
- Your pension contributions are calculated only on earnings above £6,240
- Your employer contributes the legal minimum of 3%
- You notice discrepancies between your total salary and pensionable earnings
What You Need to Do Now
Lewis urges all employees to take immediate action by checking their pension statements and payslips carefully. Compare your total salary with the amount being used for pension calculations to identify any shortfalls.
If you discover you're being underpaid, the first step is to raise the issue with your employer's HR or payroll department. Many companies may be unaware they're using the minimum calculation method and could be willing to switch to more generous contribution models.
For those who hit dead ends with employers, Lewis recommends contacting The Pensions Advisory Service for free, impartial guidance on resolving pension disputes.
With retirement planning becoming increasingly crucial amid economic uncertainty, ensuring you receive every penny of pension entitlement could make a substantial difference to your financial future.
