A: From October 1, all employees started to be enrolled in the Government backed National Employment Savings Trust (NEST) pension scheme. You can opt out, but if you do without any other pension scheme planned, you will put yourself at great risk of not having enough income to enjoy a comfortable retirement.
You may be worried about the amount of money coming out of your salary every month, but this will only be 2% at the beginning, rising gradually to 8% in six years. This will be taken as a salary sacrifice so isn’t subject to tax and national insurance. Plus, your employer is obligated to pay an extra 50% of your contribution into your pension every month too, so it’s like you’ll be earning extra money.
If you’re still unsure, first check that your company is auto-enrolling you from 1st October 2012. Many smaller companies with less than 30 employees do not have to complete enrolment until April 2017. Then, if you still want to opt out of the NEST, please make sure you look into alternative ways to save for your retirement.
Andrea Ventress, Money expert
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