Pay rises unlikely to lead to pension contributions rise, IFS says

IFS finds employees do not capitalise on opportunities to boost savings

Martin Richmond
clock • 2 min read

Employees are running the risk of poor retirement outcomes by failing to increase their contributions during significant changes to their finances, according to the Institute for Fiscal Studies (IFS).

The IFS report - When and why do employees change their pension saving? - published today (24 February), found savers failed to utilise substantial changes to their financial circumstances, such as a pay rise, to increase their pension contributions and boost their retirement savings. The findings discovered less than one in 100 private sector employees opted to increase their pension contributions in response to a 10% pay rise, including employees aged between 50 and 59 years old, putting them at increased risk of having insufficient income in retirement. The institute noted other su...

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