Have you been furloughed? Here's how it could hit your pension entitlement

Your pension savings could be squeezed by the state's furlough scheme – and its withdrawal.

Woman at a desk © Getty Images
If your employer contributes less for several months, it could leave a big dent in your retirement savings © Getty
(Image credit: Woman at a desk © Getty Images)

For more than eight million people the government’s furloughing scheme is a lifeline, enabling employers to keep staff on when they might otherwise have had to consider redundancies. However, if you’ve been furloughed, you do need to keep an eye on your pension savings, particularly as the Job Retention Scheme changes over the summer.

The auto-enrolment pension system requires all employers to offer a pension scheme and to enrol you unless you specifically opt out. At least 8% of your monthly salary must go into the scheme each month, with 5% coming from you and 3% coming from your employer.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.