Friends and family mock me for checking my pension at least once a month. But there is a good reason for it. Back in 2016 when I was on maternity leave with my eldest, this frequent \u2014 some would say borderline obsessive \u2014 checking saved me from losing out on thousands of pounds.<\/p>\n
My daughter was six months old when I realised that my employer at the time had dropped my pension contributions to zero when I entered the statutory maternity leave period. <\/p>\n
This was a huge drop from the combined 10 per cent contributions that my employer and I had been making before I went on leave and, if I had not noticed the mistake, I would have lost out on not just six months of contributions, but also on any growth on that money.<\/p>\n
Pension contributions cannot be made via salary sacrifice if you are on statutory maternity pay because government guidance says that it must be paid to you in full, so cannot be given up in return for higher employer pension contributions. Employers, however, have to continue to pay pension contributions at the same rate as before the leave \u2014 covering your contributions, and theirs. In my case this was completely missed. <\/p>\n
And I was not the only one. Two of my former colleagues, who were on leave at the same time, had the same issue.<\/p>\n
Underpayment of pensions is not just a women\u2019s issue, nor is it something that just affect private schemes. Thousands of pensioners have also been getting a smaller state pensions than they should.<\/p>\n
Many pensioners have been underpaid an estimated total of more than \u00a31 billion because of administrative failings within the state pension system. The actual total owed is not expected to be known until March 2027.<\/p>\n
\u2022 The pension payroll blunder costing families thousands<\/a><\/p>\n And while the Department for Work and Pensions will automatically refund many, in some instances you need to apply to get what you are legally owed. Sadly, some were underpaid for decades or even died without ever getting the state pension that was rightfully theirs.<\/p>\n And while receiving too little has been a problem with pensions, paying too much and getting ripped off has been rife in the investment industry. <\/p>\n In 2024, after years of reporting on its practices by this newspaper, the UK\u2019s largest wealth manager, St James\u2019s Place, was forced to put aside \u00a3426 million<\/a> in compensations for charging for financial advice that customers never had. <\/p>\n The firm had been automatically opting customers into paying for annual financial reviews, charging 0.5 per cent of the value of their investments and pensions. But while some received reviews in the first couple of years, many investors said they then stopped altogether. The payments, however, continued \u2014 year after year after year.<\/p>\n A customer with a \u00a31 million pension may have paid \u00a35,000 annually for the non-existent reviews, but may not have realised for years, having a devastating impact on their investments. Ten of thousands of pounds were lost by thousands of diligent savers. <\/p>\n