How a chat with ‘auntie’ helped a young worker bag free money in a UK pensions scheme

How a chat with ‘auntie’ helped a young worker bag free money in a UK pensions scheme Joining a company scheme at 18 seemed ‘too expensive’ for Rio until someone close put him right

One 20-year-old’s financial future is looking brighter after his aunt convinced him to join his workplace pension and take advantage of the “free money” on offer.

Rio started working at 18, too young to be “auto-enrolled” into his company’s pension scheme. He as given the option to join but had decided not to because he felt it was too expensive – but, fortunately for him, his “Auntie Susan” is a pensions expert at a leading retirement firm, and she soon put him right.

Nearly two years later, being in the scheme has cost him about £2,000 in his own contributions, but he already has £8,000 in his fund.

“I’m glad my Auntie Susan could explain to me what I would be losing out on if I didn’t join my workplace pension early,” he says. “All I really saw was the fact that I would have less money to spend right now, but I didn’t really understand the free money I was giving up.”

Since 2012, employers have had to enrol eligible workers into a workplace pension scheme into which both pay money. This regime is known as automatic enrolment, or auto-enrolment for short. It usually starts at age 22, if you are employed and earn more than £10,000 a year.

But you do not have to wait until you meet the criteria – you can ask to join a workplace pension from age 16.

Starting to pay into a pension early can make a huge difference to the amount you end up with when you retire. The government says every £1 that you save into a pension in your early 20s could be worth £9 by the time you retire. That’s includes tax relief and your employer’s contribution, but the lion’s share is investment growth.

With this in mind, parents, relatives and family friends are being urged to have this sort of conversation with young people about the benefits of joining a workplace scheme as soon as they are able to, as opposed to waiting until they are automatically put into it by their employer.

Rio’s Auntie Susan is Susan Hope, a pensions expert at Scottish Widows who specialises in workplace schemes and retirement planning.

Rio left school and got a job as a technical trainee in September 2024.

She says: “The next month, he told me he wasn’t going to join his workplace pension because it was ‘too expensive’. What he meant was that he felt his £83 a month (5% employee contribution) was too much for him.”