An analysis carried out by insurer Royal London has revealed that more than three million people employed by large businesses are failing to claim around £2 billion a year in additional pension contributions from their employer.
Many UK workers pay a standard percentage of their wage into a pension, and their employer contributes as well. Some large firms also offer to ‘match’ additional employee pension savings when they save more.
However, Royal London has found that many workers are unaware of this, and have therefore not taken advantage.
It calculated that around £2 billion in employer pension contributions could be available to employees if they choose to save to a maximum as opposed to a minimum.
Steve Webb, Director of Policy at Royal London, stated: ‘Millions of workers are missing out on ‘buy one, get one free’ money from their employer in the form of ‘matching’ pension contributions.
‘At a time when money is tight for many people and pay rises may be limited, getting your employer to contribute more to your pension can be a very cost-effective strategy.
‘When individuals are thinking about where to put their money to get the best return, the chance to more than double your money through an employer contribution and tax relief from the government takes a lot of beating.’