If you choose not to opt out of your workplace pension, you will need to make a regular contribution into your pot.

Your employer is obliged to contribute an amount that is equal to a percentage of your earnings. Usually, this is done on the basis of ‘qualifying earnings’, which are your earnings between £6,240 and £50,270. Currently, an employer must contribute at least 3% and you must contribute the rest to make a minimum overall contribution of 8%. You will also get tax relief on your contributions, which means the government is also contributing to your pension.

You can choose to raise your own level of contributions, if you feel you can save more. The minimum contribution mandated by the government was not selected to provide enough to give most people a comfortable lifestyle when they retire. It is generally recommended that you should be saving between 12% and 15% of your whole salary to save up enough to live a moderate is not luxurious lifestyle in the future.

You can explore the impact of changing your contributions using the Financial Planning Tool on Maji.