New pension rules explained - we answer the most common questions about the increased deductions coming from wages - The Mirror

Far more money is now being pulled from people's wages automatically to cover their pension later in life - and it will go up again soon - this is what it all means

Without asking for it, millions of workers have been enrolled in pensions by their boss. That means money is being taken out of their pay and saved by default.

And the amount of money going from your wages into retirement savings has just tripled from 0.8% to 2.4%.

It's not the last rise either - with planned increases coming in the years ahead in an attempt to get Brits saving for their futures.

Here is a look at how people are affected:

Why was automatic enrolment into workplace pensions introduced?

Auto-enrolment started in 2012, rolling out gradually from the biggest companies, which tend to have more experience of pensions, to the smallest.

It was introduced amid fears that, as people live for longer, many are not putting aside enough cash for a comfortable retirement.

Auto-enrolment makes pension saving the "do nothing" default option. Eligible workers have to actively opt out if they do not want to take part.

How have minimum contribution rates increased?

Contribution rates are made up of money put in by staff and employers and also get the benefit of tax relief.

Previously, the minimum combined rate was 2% and it has now jumped to 5%.

In April 2018, the combined minimum contribution rate will increase again, to 8%.

So if I just save the minimum, will that be enough to get me the kind of retirement I want?

Pension experts say that while the minimum is a starting point, many people would need to save significantly more than this to achieve the level of comfort in retirement they want.

Aviva has said it would like to see contribution rates increased gradually to 12.5% by 2028.

The earlier someone starts saving for a pension, the more time they have for their investments to grow and boost the size of their pot.

How successful has automatic enrolment been so far?

Up to now, around nine in 10 workers who have been auto-enrolled have remained in their pension rather than opting out.

I'm making minimum contributions. Does the increase this month mean I'll see a bigger chunk taken out of my pay packet?

The increase coincides with the new tax year, with various cash boosts for households which should help to cushion the impact.

It is a time of year when many workers see their wages increase through pay rises.

This month also sees the tax-free personal allowance raised from £11,500 to £11,850.

And an increase in the National Living Wage from £7.50 to £7.83 will benefit more than two million workers.