The coronavirus pandemic has plunged many businesses and workers into uncertainty as the economy struggled in 2020. The UK economy suffered a record annual slump in 2020, shrinking by 9.9 percent as coronavirus restrictions hit output. The contraction in 2020 “was more than twice as much as the previous largest annual fall on record”, the Office for National Statistics (ONS) said. Britain’s annual economic decline was the worst in the G7.
While the vaccine rollout is giving people hope for a speedy recovery, Britons will be paying more attention to their finances in the current climate.
Finance expert Martin Lewis explained a handy tip for low earners to increase their pension while a pay-rise seems off the cards.
Writing on his blog, the Money Saving Expert founder explained that this could help people earn more from their employer.
He said: “If you’re under 22 or on a low income, a pension is probably the furthest thing from your mind, but what if I were to tell you there’s a totally legal way, that doesn’t need any negotiation, to make your employer pay you more money – possibly £1,000s over the years?”
Workers in the UK aged between 22 and state pension age are automatically enrolled into their workplace pension by law – providing they’re earning at least £10,000 a year.
But if you don’t fall into any of those categories, you can ask to opt-in, which means your employer will have to increase how much it gives you each month.
This applies to anyone under 22, over 66 or earning under £10,000 a year.
If you choose to opt-in, your employer will have to add contributions by law if you’re aged 16 to 21 and earn above £6,240 a year, are aged between state pension age and 74 and earn above £6,240 or are aged 22 to and earn £6,240 to £10,000 a year.
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Mr Lewis continued: “If you earn more than that, you will have been automatically opted in anyway.
“Though if you can, you may want to check with your employer whether if you save into your pension it’ll match the contributions.”
In March’s Budget, many feared that pension tax relief could be abandoned.
Chancellor Rishi Sunak didn’t announce any major changes, although he did lay out plans to freeze pension lifetime allowances.
But Aegon pensions director Steve Cameron told Express.co.uk that there may be another Budget this year in which hikes could be issued, including a potential removal of another manifesto pledge.
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He said in March that the pension triple lock could be ditched.
Mr Cameron said: “We are anticipating another Budget before the year ends, so we think there’s every chance there will be another Budget maybe in November.
“Sunak did say that it is too early to make detailed fiscal policy announcements. We still don’t know the full costs of furlough and other support schemes. We still don’t know the full impact on the economy.
“I do expect he will be making further changes which could be of a detailed and wide-ranging nature. We shouldn’t assume that because he didn’t announce things, he won’t be thinking about them as longer-term measures.
“We have got a manifesto commitment on the pension triple lock and tax triple lock, with all of these locks he’s got more locks than Houdini to grapple with.
“At some point, the Government might decide we have to be open with the public and say, ‘If we stick with these manifesto commitment we will have too many restrictions to do what is right to do.’
“He’s not done it so far, but in future there may come a time when he has to level with the public.”