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Gen Z trainees opt out of workplace pensions due to cost pressures

One trainee estimated opting out could cut future retirement income by between £5,000 and £10,000 over time.

Reported · Written up by our desk · Mortgages

BBC Business profiles Hassan Nassar, 26, who stopped paying about £430 a month into his NHS workplace pension for around six to 12 months after saying he was really cash strapped.

Nassar said he needed the money to help care for a sick family member, save for his first home, and cover rent plus student loan repayments, while also estimating that missing contributions could cost him between £5,000 and £10,000 in future retirement income due to lost compound interest.

The report notes that UK workplace pensions are generally structured around automatic enrollment for employees aged 22 and over who earn more than £10,000, with contributions taken from pay, usually around 5%, plus tax relief and a minimum employer contribution.

It adds that the decision to opt out is becoming more common among Gen Z and millennials as cost-of-living pressures grow.

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