One in three adults increase pension contributions after a pay rise – Standard Life

Emma Furlonger, managing director for workplace and retail intermediary at Standard Life, said: “It is really encouraging to see that more than a third of people increased their pension contributions the last time their income rose, and that even more gave it some thought. 

“A pay rise, promotion or bonus can be a really useful moment to take stock of your finances and consider whether you could put a little more towards your future, and clearly people understand the benefits of doing so.

“What’s important to remember is that you don’t have to direct your entire pay rise into your pension.”

Furlonger added: “If it’s affordable, putting aside a small proportion before becoming accustomed to the additional pay can be a manageable way to strengthen your retirement savings while still enjoying the benefit of earning more.

“A pay rise can be a great opportunity to review your pension contributions. 

“For some people, directing part of an increase into their pension can be a tax-efficient way to boost retirement savings.”

She said: “Where employers offer salary sacrifice, there may also be National Insurance savings, meaning the effect on take-home pay could be smaller than expected. 

“The right approach will depend on your individual circumstances, but it’s worth taking a moment to understand the options available to you.

“Pension Engagement Season is a good prompt to understand what you and your employer are currently contributing, check whether you are on track and think about whether your next pay rise, bonus or other change in circumstances could be an opportunity to give your future finances a boost.”