THOUSANDS of British women have been warned they could be missing out on thousands of pounds in their pension pot due to a “common error” from their employers.
Workers who leave the office to head on maternity leave say their contributions have been falsely changed.
Workers who go on maternity leave could be missing out on thousands of pounds worth of pension contributions[/caption]
This is despite the fact that employers should continue topping up their pension contributions based on their full salary, Sky News reported.
Seething Brits have fumed that they have been missing pension payments ranging from hundreds of pounds to £4,000.
According to advocacy group Nugget Savings, more than 100 out of 236 workers surveyed said they experienced errors regarding their pension contributions during maternity leave.
“We’re concerned we have just scratched the surface of this issue,” a spokesperson for the organisation said.
“This error could have started as far back as auto-enrolment in 2012, therefore affecting potentially millions of women.”
FIX THE WAGE GAP
The Sun has previously reported how millions of women are hundreds of thousands of pounds worse off than their male counterparts just because of their gender.
The issues take shape from an early age.
Parents typically give boys 20 per cent more pocket money, £3 per week compared with £2.50 for girls, leaving boys £26 better off a year, found research by Starling Bank.
Meanwhile, it found that girls’ toys cost five per cent more than boys on average.
Girls are also exposed to public attitudes that suggest they are irresponsible with money from a young age, such as the viral trend “girl math”.
Meanwhile, the cost of living crisis has disproportionately affected women, research suggests.
According to the Young Women’s Trust, 36 per cent of young women have taken on more debt in the last 12 months, compared to 28 per cent of young men.
Women aged 21 to 29 are typically paid 1.3 per cent less than men, known as the “gender pay gap”.
This figure means men can typically get on the housing ladder one year earlier than women.
Young women are also hit by the “pink tax” where they pay nearly 40 per cent more for essential toiletries than men.
Women who care for kids or relatives see the gender pay gap widen, with men aged 40 to 49 years paid 9.1 per cent more than women.
They are a third more likely to be providing unpaid care or childcare than men, while almost three-quarters of part-time workers are women.
It means they earn less and therefore have less to save, invest or put in a pension.
They may also stop National Insurance (NI) contributions, which affects their state pension.
Divorce can also cost women more, with women often not dividing pension assets, according to Scottish Widows.
It said this can mean they miss out on an average of £77,000 in retirement.
What are the different types of pensions?
WE round-up the main types of pension and how they differ:
- Personal pension or self-invested personal pension (SIPP) – This is probably the most flexible type of pension as you can choose your own provider and how much you invest.
- Workplace pension – The Government has made it compulsory for employers to automatically enrol you in your workplace pension unless you opt out.
These so-called defined contribution (DC) pensions are usually chosen by your employer and you won’t be able to change it. Minimum contributions are 8%, with employees paying 5% (1% in tax relief) and employers contributing 3%. - Final salary pension – This is also a workplace pension but here, what you get in retirement is decided based on your salary, and you’ll be paid a set amount each year upon retiring. It’s often referred to as a gold-plated pension or a defined benefit (DB) pension. But they’re not typically offered by employers anymore.
- New state pension – This is what the state pays to those who reach state pension age after April 6 2016. The maximum payout is £203.85 a week and you’ll need 35 years of National Insurance contributions to get this. You also need at least ten years’ worth to qualify for anything at all.
- Basic state pension – If you reach the state pension age on or before April 2016, you’ll get the basic state pension. The full amount is £156.20 per week and you’ll need 30 years of National Insurance contributions to get this. If you have the basic state pension you may also get a top-up from what’s known as the additional or second state pension. Those who have built up National Insurance contributions under both the basic and new state pensions will get a combination of both schemes.
