People who earn at least £26,000 set to be £3,100 better off thanks to Bank Holiday rule

People have been told to utilise their Bank Holidays better - and the tip could see them £3,000 better off in retirement. A Bank Holiday pension 'hack' could see you boost your retirement pot by £3,100 if you are auto-enrolled into a workplace pension scheme.

An employee earning £26,000 would see their employer contribute around £37 a year across the nine bank holidays as part of the scheme, Lloyds Bank and Scottish Widows found. The research explains if someone is enrolled into a workplace pension scheme from the age of 22, and they retire at the age of 68, this would add up to an extra £3,100 into your pension pot.

Since 2018, all employers have been required by law to set up and enrol all eligible employees into a qualifying pension. Your employer will explain, in writing, exactly how automatic enrolment will affect you. In many cases, this will be done by letter, but some employers may use other methods, such as email.

READ MORE Brits in Spain and Portugal told to prepare for 'dramatic' shift starting today

Robert Cochran, retirement expert at Scottish Widows, said: “Saving into a workplace pension is a real no brainer as it is the most tax efficient way to save for the long term, and the advantages of your employer contributing towards your pension are well worth it. A pound saved into a workplace pension can double from day one – thanks to employer contributions, compound interest and tax relief, so while it’s never too late to start saving, a pound saved by someone in their twenties can bring four times as much buying power as a pound saved by someone in their fifties.”

An employee must work, or ordinarily work, in the UK and have a contract of employment (i.e. is an employee rather than a self-employed contractor) or be contracted to provide work and services personally (i.e. is not permitted to sub-contract their duties to a third party).

Employees must not already be in a qualifying workplace pension, be at least 22 years old, have not yet reached State Pension age and earn more than a minimum amount a year known as the earnings trigger (£10,000 for tax year 2024/25).