Would you turn down £6,000 towards your pension pot?

Employees could be giving up approximately £6,000 in pension contributions over a 10 year period if they opt out of auto-enrolment, Fidelity Worldwide Investment has revealed.

The need to save for retirement is a fact of life but not nearly enough people are doing it in the UK - this could soon change now that auto-enrolment is being rolled in the UK. Up to 11 million people will be affected over the coming years. There is however the option to opt out and Fidelity can reveal just how much you could miss out on if you do. If you are not already saving into a workplace pension and you work for company with a head count of more than 120,000 employees then you will be faced with this decision imminently.

In accordance with the legal minimum employer contributions, someone on the UK's median salary of £26,200 who is enrolled in a pension scheme on 1st October 2012 could receive approximately £6,000 in employer contributions and Government tax relief in their pension pot if they stay enrolled for 10 years.

The employee would need to commit to save around £14 pounds a month of their own money for the first year, then an average of £15 for the next four years and an average of £78 for the following five years.

Julian Webb, Head of DC & Workplace Savings at Fidelity comments: "Only a quarter of private sector workers are currently active members of their employers' pension schemes so while the need to save for retirement is a fact of life what is evident is that not enough people treat it this way.

"Whilst there may be specific reasons for some people to opt out of auto-enrolment, for example, high levels of personal debt, in most cases staying enrolled is likely to be the best route

"Retirement income needs are growing partly because people are living longer and their heath care needs are becoming more demanding but also because people want to maintain their lifestyle at retirement. All of this means that it is more important than ever to start saving for retirement which is why we strongly urge people to embrace auto-enrolment and begin saving for the long-term. We hope that these figures will help people realise just how much they could be waving goodbye to if they opt out!"