I’m a pensions expert – here’s four common mistakes that could see you miss out on THOUSANDS in retirement

YOU could be missing out on THOUSANDS of pounds for your retirement by making these five common pension mistakes.

Saving for the future might not seem like a priority right now as households are being hit by a crippling cost of living crisis.

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But not thinking about your retirement now could mean you’re losing out on extra money you could use to boost your pension.

This is important as savers have been warned that the state pension won’t be enough to get by on financially in retirement.

It means that you’ll want to put as much cash aside as you can to make sure you’re not struggling in later life.

That’s why The Sun sat down with Aegon head of pensions Kate Smith to get the lowdown on what pension mistakes savers are making that is costing them thousands.

Ms Smith has decades of experience dishing out financial advice on retirement.

From opting out of your workplace pension to losing thousands of pounds in childcare benefit payments, here’s four errors you need to avoid.

Opting out of a workplace pension – miss out on £100,000s

When you join a company, you’ll automatically be enrolled in a workplace pension.

A minimum of 8% must be paid into your pension in total – you must contribute at least 5%, and your employer at least 3%. You’re eligible for the scheme if you are aged 22.

But you can choose to opt out of the scheme.

Choosing to do so, however, could have “significant long-term consequences” on their future finances, Ms Smith said – and you could lose out on hundreds of thousands of pounds.

“An employee aged 22 with a starting salary of £20,000 per year could build up a pension fund worth around £280,300 at state pension age through saving at the minimum contribution levels,” she added.

Missing out on employer pension boosts – £1,000s

You might not know that you can boost your pension under workplace pension schemes.

While the minimum employers pay into your own workplace pension pot is 3%, many pay more than this.

Teachers, NHS staff, police officers and firefighters are among the top ten jobs with the best paying pensions, latest research suggests.

In fact, many agree to match any extra contributions workers put into their pension up to a certain limit, Ms Smith said.

“Employer matching could mean that for extra £100 you pay into your pension from your take-home pay, you’ll get £25 from government tax relief and possibly as much as another £125 from your employer,” she said.

“This can be a fantastic deal, so employees who can afford to pay more should check with their employer to see if they offer this.”

Not making most of salary sacrifice perks – £100s

A salary sacrifice scheme is where a worker agrees for a chunk of their earnings to be put into a tax-free benefit.

Often, these include benefits like a childcare vouchers, gym membership or a cycle to work scheme.

You don’t pay tax on the portion of your wages that goes towards paying for these schemes – and it lowers the amount of tax you pay overall.

“Salary sacrifice arrangements are a powerful and tax-efficient way of paying pension contributions, as the amount of salary exchanged is not liable to income tax or National Insurance contributions (NICs),” Ms Smith said.

Any way of lowering your National Insurance bill could be a good idea as the tax went up by 1.25 percentage points this month – costing some workers hundreds more each year.

Losing childcare benefits

Parents can easily avoid losing thousands of pounds a year in childcare benefits by upping their pension contributions.

The amount you can get from childcare benefit depends on your income.

When your earnings go over £50,000 you lose some of the child benefit payment.

And if you earn over £60,000, you have to pay back the whole lot.

For your first or only child, you get £21.80 a week, and for each subsequent child, you get £14.45 a week.

But if you increase how much you are stashing away in your pension pot, it lowers the income HMRC takes into account, Ms Smith said.

“For those who find themselves over this threshold, paying a personal contribution into your workplace pension reduces your net income – and could mean you could regain some, or potentially all, of your child benefit entitlement,” she said.

So if you earned £53,000 a year, but paid £3,001 into your retirement fund, you’d drop back below the threshold and keep all the child benefit.

This post first appeared on thesun.co.uk