Martin Lewis urged people not to miss out on a "totally unbeatable" deal during the cost of living crisis. He issued his warning to viewers during tonight's episode of The Martin Lewis Money Show's pension special.
The 90-minute episode attempted to answer the questions that viewers asked most often about their pensions, which can be complicated and technical. But during the show, Martin received one specific question to do with the current pressure on people's finances.
Martin was asked whether, during the cost of living crisis, it was better to opt out of your workplace pension. The consumer champion urged everyone not to do so.
"If you opt out of your pension and you are an employee you are giving up what is a deferred pay rise," he said. "You lose money from your pocket now but in totality, you are getting more money. You are saving money now but in the future, you are giving up more money.
He added: "It is totally unbeatable. Why would you opt out of a pay rise unless you absolutely had to? Especially as it is going to give you such later life benefits.
"So really opting out for, for the vast majority of people, there are a few minor circumstances, but for the vast majority of people is a mistake."
Martin said that only in very rare situations would it be beneficial to opt out of your workplace pension. He said that these situations were often the most extreme such as if you were unable to feed your family or pay your heating bill.
Workplace pensions have a number of benefits. Pension contributions are tax-free, meaning that often for every £80 you would be paid, you could save £100 into your pension instead.
Employers often also pay additional sums into your pension every time you save. This means your savings become higher.
Martin also warned that pension savings need to last for a long time after you retire. The average person can live around 30 years after they retire, therefore the larger someone's pension pot is the better.
