MIDDLE-aged workers who get made redundant are suffering 40 per cent smaller pension pots compared to luckier colleagues.
Brits aged 39-54 who have suffered compulsory redundancy have average pensions savings of £120,634 – £81,383 less than those who haven’t had the career setbacks, according to research.
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Those affected by voluntary redundancy do better, amassing average pension pots of £138,834, compared to £178,329 for those who haven’t experienced it.
The survey by financial technology firm Dunstan Thomas was based on responses from 2,000 adults.
Compulsory redundancy has the second biggest impact on savings levels after earnings, it found.
Roughly 42 per cent of Brits in the age group have been forced out of a job at least once, and 4 per cent have experienced this four or more times in their careers.
Meanwhile, 21 per cent have taken voluntary redundancy at least once, and 3 per cent four or more times.
How to make up the shortfall in pension savings
If you’ve been made redundant during your career and you’re worried about retirement, remember that you don’t have to use a pension plan to save cash.
Naturally, you’ll miss out on auto-enrolment contributions by losing your job.
But if you received a redundancy pay-off then it’s worth saving this somewhere accessible, for example an Isa, Adrian Boulding, Dunstan Thomas’ director of retirement strategy, told The Sun.
He added: “Then if you need to spend it to cover the gap until your next job you can, but if you get another job quickly, you can mentally label that Isa as part of your retirement savings.”
You should also be aware that many employers operate a “last in, first out” policy, so you’re at greater risk when you start a new job if the firm runs into difficulties.
Mr Boulding recommends you to save some of the new salary in a flexible account that you can dip into short-term if needed.
Alternatively, if things do go well at your new job, you can leave it long-term for retirement.
Last but not least, you could open a Lifetime Isa, Mr Boulding said.
This lets you save up to £4,000 per year and pays out a bonus of 25 per cent (up to a maximum of £32,000) towards retirement once you’re over the age of 60.
Just keep in mind that you can only open one if you’re aged 18 to 39, and if you want early access you’ll pay a 25 per cent penalty on the amount withdrawn.
The top account is currently offered by Moneybox, which offers 1.4 per cent on your savings.
Check out our round-up of the best accounts here.
Women are £106k worse off than men at retirement due to lower paid jobs and part-time work.
While young workers are missing out on savings up to £20,000 towards retirement due to a delay in government pension reforms.
Pension savers could miss out on thousands of pounds by not letting their provider know they when they plan to retire.
