London Daily

Focus on the big picture.
Friday, Sep 19, 2025

More people leaving workplace pension schemes, TUC warns

More people leaving workplace pension schemes, TUC warns

Growing numbers cannot afford to save for retirement, prompting calls to increase employer contributions
Growing numbers of workers are cutting their workplace pension contributions or opting out of schemes entirely because they cannot afford payments – prompting calls for employers to increase the amounts they pay in.

With real wages falling and bills rising sharply, people across the country are looking for ways to reduce spending and supplement their incomes, and the TUC said it was hearing about staff in both the public and private sectors who had concluded they could not afford to save for retirement at the moment.

“Based on what our unions are telling us, anecdotally they are saying quite a lot of people are having to leave schemes,” a spokesperson for the trade union said. “That is public sector and private sector … It’s something we’re hearing quite a lot from the public sector unions.”

Its warnings follow data released in August indicating that the number of people choosing to opt out of their company pension scheme increased by almost a third between March and July this year.

The figures were issued by Penfold, a digital pensions platform used by private savers, the self-employed, company directors and businesses.

About 10% of people quit their workplace scheme, and the TUC said Penfold’s findings – which would translate into a two to three percentage-point increase in opt-out rates, lifting them to about 12%-13% – appeared broadly consistent with what it was hearing.

The reports have already led to calls for the government and the pensions industry to work together to come up with a solution to avoid people being left short at retirement.

Investment advisers say workers thinking of quitting their scheme need to think very carefully before jumping ship. Someone who opts out is essentially giving up the pension contributions from their employer, which effectively amounts to “a voluntary pay cut”, said Tom Selby, head of retirement policy at investment firm AJ Bell. “Furthermore, you will miss out on the upfront boost provided by pension tax relief,” he added.

Tisa (the Investing and Saving Alliance), a membership organisation for UK financial firms, said: “In times like these, reducing or opting out of pension contributions is unsurprising, and it is easy and understandable to forget about the long term.”

Renny Biggins, head of retirement at Tisa, said possible solutions it was proposing included increasing the amount that employers had to pay in under the UK’s auto-enrolment workplace pension regime from 3% of earnings to 6%, in order to allow staff to cut their contributions and release some money to supplement their disposable income.

Alternatively, employers could opt to continue paying pension contributions while allowing their workers to take a temporary contribution holiday.

“We recognise there are immediate needs for people to provide for their families, but we are nonetheless concerned that if people decide to reduce or opt out of their pension now, there will be consequences in the future,” said Biggins.

Jack Jones, pensions policy officer at the TUC, said: “Our longer-term policy target is for increased employer contributions.”

National Employment Savings Trust (Nest), a publicly owned pension scheme set up by the government which now has 11.2 million members, said the opt-out rate for newly enrolled workers had largely remained stable throughout the pandemic and was currently at 10.2%.

Nest said it had seen a very small increase in the number of members becoming inactive, which included people who had chosen to stop paying in, but that it could not say if this was due to increases in the cost of living.
Newsletter

Related Articles

0:00
0:00
Close
Massive Strikes in France Pressure Macron and New PM on Austerity Proposals
Trump Seeks Supreme Court Permission to Remove Fed Governor Lisa Cook
Hillary Clinton’s Reckless Rhetoric Fuels Division After Charlie Kirk’s Assassination
NASDAQ Rises to Record as Intel Soars More Than 20%, Nvidia Gains 3%
Nvidia’s $5 Billion Bet on Intel Reshapes AI Hardware Landscape
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Trump’s Quip on Biden and Google Lawsuit Revives Debate Over Antitrust Legacy
Macron and his wife to provide 'scientific photographic evidence' that she is a real woman
US Tech Giants Pledge Billions to UK AI Infrastructure Following Starmer's Call
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
DeepMind and OpenAI Achieve Gold at ‘Coding Olympics’ in AI Milestone
SEC Allows Public Companies to Block Investors from Class-Action Lawsuits
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Federal Reserve Cuts Rates by Quarter Point and Signals More to Come
Effective and Impressive Generation Z Protest: Images from the Riots in Nepal
European manufacturers against ban on polluting cars: "The industry may collapse"
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Trump: Cancel quarterly company reports and settle for reporting once every six months
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
US Launches New Pilot Program to Accelerate eVTOL Air Taxi Deployment
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
×