Get all your news in one place.
100’s of premium titles.
One app.
Start reading
Edinburgh Live
Edinburgh Live
National
Katie Williams

Martin Lewis says opting out of workplace pension is like 'turning down pay rise'

Financial guru Martin Lewis was back on ITV with his Money Show.

After concentrating on the energy crisis over the last couple of weeks, Martin had a 'Pensions special' episode of The Martin Lewis Money Show Live.

This comes as the State Pension is set to rise in April.

READ MORE- Edinburgh Weather: Storm Eunice disrupts trains between capital and London

On February 17, he gave his viewers advice on how to get the most out of their pensions-and avoid mistakes that could set them back thousands.

Speaking on the show, he said said: "Your pension may provide income for a quarter of your life.

"It's important to get them right, as small mistakes can cost you tens of thousands of pounds."

The first nugget of advice that Martin had was to find any lost pension pots you might have, pointing out there is around £20 billion in pensions currently unclaimed in the UK.

It is an easy mistake to make as many jobs offer an pension plan but once you move to a different job, it's easy to forget about the pots you've had in the past.

His viewers were clearly listening as the Government has an online Pension Tracing Service that can help track down pension pots but between 8.30pm and 9pm, it crashed during the show.

The finance journalist also encouraged viewers not choose other ways of putting cash aside while ignoring their pension.

He warned that while saving is important, no savings deals come close to beating the returns pensions get.

Lewis added: "There's nowt out there like it. Saving doesn't come close. In general you would be far better off using a pensions wrapper."

As the Mirror reports, UK workplaces have been auto-enrolling their staff onto private pensions since 2012.

Employers have to auto-enrol staff in the UK earning more than £10,00 a year and aged from 22 to the state pension age, currently 66.

Under this auto-enrolment , workers have to save at least 8% of their salary a year into a pension.

Normally part of this comes from a worker's own salary, and part from their employer.

So if a worker puts in 5 percent, their employer will add an extra 3 percent.

While you can opt out of the schemes, Martin Lewis urged people not to unless they don't have a choice.

"My big message is: opt out and you are effectively giving up a pay rise," he said.

He explained that what you contribute to your pension is not taxed until you withdraw it-but by that time is should have grown a considerably.

Lewis also said that consolidating pensions can help workers keep track of multiple pots - and help save money on yearly fees.

But he said anyone doing this should beware of fraudsters, who pretend to offer consolidation services to get their hands on retirement cash.

He said "One really important warning - if you are sitting at home and someone is calling up offering consolidation, be very careful as there are a lot of scammers out there."

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.