UK workers urged to keep pension contributions above 5% as retirement age rises

UK workplace pension 5% contribution rule state pension age rise private pension withdrawals early pension access

Money Saving Expert warned that UK employees should not opt out of, or reduce, workplace pension contributions below the statutory 5% level. Dropping below this threshold can release the employer from its matching contribution, potentially costing workers the “free cash” that would otherwise be added to their pension pot.

Separately, a BBC personal‑finance expert highlighted a surge in early withdrawals from private pensions ahead of upcoming changes to the state pension age and access rules. The state pension age will rise from 66 to 67 between April 2026 and March 2028, and the earliest age for taking private pension benefits will increase from 55 to 57 from April 2028. This shift is prompting many to draw down savings early, risking insufficient funds for retirement later.

Both experts stressed that early pension access and reduced contributions could leave workers with significantly lower retirement incomes.

Sources

Workers given 5% pension warning as you could be losing out [www.mirror.co.uk]

2 months ago

BBC personal finance expert warns of big pension age change [www.liverpoolecho.co.uk]

2 months ago