The show featured some top tips from the consumer expert as well as some ideas sent in by listeners. One fan of the show shared a piece of advice urging people to start paying into their pension early on in life, from the age of 18.<\/p>\n
Mr Lewis said he “totally agrees” with this principle of starting to build your pension pot from a young age. He also explained some key rules to note around how pensions work.<\/p>\n
Mr Lewis said: “We have auto enrolment in this country that means if you are an employee and you’re earning over \u00a310,000, you will automatically be contributing to a pension and your employer will have to match to an extent those contributions. You put five percent in, they put three percent in.”<\/p>\n
The auto enrolment system means that if you are aged between 22 and the state pension<\/a> age, which is currently 66, and you earn at least \u00a310,000 a year, your employer has to enrol you into a workplace pension scheme.<\/p>\n A minimum of eight percent of your earnings have to be paid into the scheme. This can be made up of five percent from the employee and a matched three percent from the employer.<\/p>\n These amounts can vary as long as the minimum eight percent total is reached. You can also choose to pay in more above the minimum amount.<\/p>\n As the question of paying into your pension at 18 had come up, Mr Lewis explained another element of the auto enrolment rules. He explained: “If you are 18 and you are earning over roughly \u00a36,500, you are not opted into a pension but if you do opt in, your employer still has to do the matching contributions.”<\/p>\n The rule he was referring to here is that if you earn over \u00a36,240 a year, you can decide to start paying into a workplace pension, meaning your employer will also have to pay in. Any worker aged 16 to 74 can do this.<\/p>\n Mr Lewis also said he thinks the rules should be extended. He said: “I actually think we should pre-extend the rules, because auto enrolment starts at 22. I think the earlier you start putting money into your pension, the longer it has to compound.”<\/p>\n There have been calls to extend auto enrolment to include workers aged 18 and over, and to include workers with any amount of earnings. The Labour Government said in a 2024 response to a question about the issue<\/a>: “We will consider if and when to make changes to auto enrolment, balancing the need for improved pension outcomes with the effects on businesses.”<\/p>\n