Thousands of workers to get £4,500 boost imminently

The money is part of a new government scheme

Thousands of part-time workers are set to get a £4,521 ‘free cash’ pension boost within weeks. Millions of people will get up to £1,800 a year more in April when the minimum wage increases and for those over 21, the National Living Wage is hiked to £11.44 from £10.42.

And workers will also get a boost to their pension worth £4,521 because they will be automatically enrolled in a workplace pension for the first time. The threshold at which you start paying in is £10k, reports Birmingham Live.

Steve Webb, partner at consultants LCP, and former government pensions ministers, told the Sun newspaper: “The big increase in the living wage this April will take the wages of thousands of part-timers over the crucial £10,000 threshold.”

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“At this point their employer will be required to enrol them into a pension and make a contribution. This could be an important first step on the road towards building up a decent pension pot and most importantly having enough set aside to be able to afford to retire at a decent age rather than work until you drop”.

Kate Smith, head of pensions at Aegon said ahead of the new tax year on April: “A hidden benefit is that the increase in the National Living Wage will also have a positive impact on pension contributions, enabling employees to build up larger pension pots for a more secure retirement.”

“As a result of the increase in the National Living Wage, an increase to £11.44 an hour (£20,820 a year) means employees on the National Living Wage will benefit from a total annual pension contribution of £1,166 a year, made up of their own and their employer’s pension contributions, meaning almost an additional £150 going into an individual’s pension over the course of a year.”