'It could cost me £10k but I need the money now': Why Gen Z are opting out of pensions
A growing number of people are opting out of these schemes due to cost-of-living pressures.
Gen Z and millennials are increasingly opting out of workplace pensions due to financial pressures, even though doing so could result in significant losses in future retirement income. Trainee GP Hassan Nassar, 26, stopped contributing to his NHS pension for several months to help with personal expenses and save for a home, estimating he could lose between £5,000 and £10,000 in future retirement earnings.
The government warns that a lack of private pension savings could lead to lower incomes for tomorrow's retirees compared to today's. About 90% of eligible workers are enrolled in automatic enrollment pension schemes, but the number of those opting out is rising. Financial advisor April Leeson advises against completely stopping contributions, even if contributions can be reduced, due to potential losses from missed employer contributions and compound interest.
Retired teacher Kharlee noticed she saved about £5,000 less than she would have if she hadn't stopped contributing during financial difficulties.
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