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Five questions to ask your employer about your pension

Workplace pensions are rarely at the forefront of people’s minds when they start a new job. Questions, understandably, are more focused on getting to grips with how their company works and whether they will get on with their new teammates.

However, ignoring one’s workplace pension can cause long-term financial problems. Namely, losing track of pension pots and an increased risk of inadequate saving.

As such, employees should engage with their workplace pension as soon as possible. This will often involve questioning their employers about the finer details of their scheme.

So, what questions should employees be asking? As a starter for ten, we’ve outlined five key points to raise with employers.

Who is my pension provider?

This may seem obvious, but you would be surprised how many people don’t know who provides their workplace pension. While this may not be an immediate concern, it can present problems when individuals choose to leave their current place of work, as it can be all too easy to lose track of previous workplace pots. Indeed, research from My Pension Expert found that a quarter (25%) of Britons aged 40 and over have lost track of pension pots and investments.

As such, knowing the name of one’s pension provider will help to track down pension pots later down the line using the Government’s pension tracking platform. Whilst the platform doesn’t reveal details of individual pensions, it provides the appropriate provider contact details, so users can track down older pots and get their retirement finances in order.

Is there a salary sacrifice option?

It is certainly worth asking if employers offer a salary sacrifice scheme. This allows employees to give up part of their salary and place it in their pension pot.

Although the idea of a salary sacrifice may not seem overly appealing, this can be a tax-efficient method of saving for retirement, as reducing one’s salary means that savers will ultimately have to pay less income tax and National Insurance. As such, it is certainly an option worth considering.

Will my contributions be matched?

Under current government guidelines, 8% of an individual’s salary must be paid into their workplace pension. So, employees must pay a minimum of 5% into their workplace pension, and employers pay the remaining 3%. However, if an employee chooses to increase their pension contributions, some employers may increase their contributions to match.

Not every employer will offer this, but it is certainly worth asking the question. Given that the recommended monthly contribution is 15% of one’s salary, receiving a further helping hand from your employer could provide a welcome boost to retirement savings.

What are my fund charges?

It’s important to note that pension providers impose charges on scheme members, including running and administrative costs. Usually, workplace pension schemes charge less than individual schemes; however, they still vary from provider to provider and from scheme to scheme, meaning they have the potential to erode the value of people’s pension pots over time. To overcome any nasty surprises later down the line, it is advisable for people to ask about charges upfront so that they can adapt their savings plan accordingly.

Do I have control over my pension investments?

Everyone has varying degrees of risk appetite, as well as different investment preferences – for example, some may favour investments more in line with their personal values. So, those who feel strongly may consider asking their employer how much control they have over how their provider manages their money.

Some employers may offer Self Invested Personal Pensions (SIPPs), which allow people to choose where they invest their money. However, this option will not be available to everyone, so those who place great importance on their investment choices should contact their employer and explore other SIPP schemes, if necessary.

Workplace pensions may not seem like an immediate priority, but overlooking their importance could negatively impact people’s retirement finances later down the line. So, it is important to engage as early as possible. Further, if employees remain confused about their pension, they should seek independent financial advice to gain a comprehensive understanding. Doing so will ensure that more employees are able to make the most of their workplace pension and set themselves up for a positive financial future.