Today, millions of people across the UK will start saving more into their pension every month, as the government raises minimum contribution rates for both employers and their employees.
On 6 April 2019 employee minimum contributions to their pensions go up from 3% to 5%.
There is a fear that some lower-income earners will drop out of their pension scheme due to other financial pressures. But ShareAction is using this moment to tell people not to opt out.
The responsible investment charity is celebrating this increase as it presents an opportunity for savers to think about their future security and the security of the world they retire into.
Pension savings are a powerful driver of the economy, making up approximately half of all investments. Invested responsibly, they can instigate much of the change savers want to see in the world such as tackling climate change or human rights abuses in developing countries. More money in the system means more power to drive this shift.
Lauren Peacock, senior campaigns officer, explains: “Today we’re challenging people to think differently about their pension contributions. Pensions are not just for retirement. Pensions are dangerous and exciting – they are invested in the world around us – the roads, the bridges, the buildings. But they also buy shares in companies which can cause extreme harm to our environment. A lot of millennials are shunning plastic straws nowadays but what they don’t realise is their pension is being ploughed into fossil fuel companies which provide the ingredients for those straws!
“You should think of today’s rise both as an investment in your future and having more skin in the game – more of a say in our economy.”
Notes to editors:
- For more information or to arrange an interview, please contact Beau O’Sullivan at firstname.lastname@example.org
- This increase from 3% to 5% means that a saver on a £25,000 salary will be contributing £79.03 a month to their pension. This is an increase of £31.61 per month, and £379.32 a year. These figures were calculated using the MoneyAdviceService Calculator and based on qualifying earnings of £18,968 per year, for someone who is 26 and earning £25,000 a year.