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Are you taking a £330 pay cut?

We set to lose out on our annual salaries from next month as minimum employee pension contributions are set to rise.

From April 6, the minimum amount that is automatically taken from your earnings for your pension will increase from one per cent to three per cent.

At the same time, employer minimum contributions will rise from 1 per cent to 2 per cent.

With ONS average weekly earnings data for December 2017 working out as an annual salary of £26,624, the difference in pre-tax pensions contributions rises from £164.74 over a year to £494.21, according to the money experts over at Hargreaves Lansdown.

Over a year, that's an increase of £329.47.

Of course, this figure is assuming that you're paying in the minimum amount but most employers will give you the option to pay in up to six per cent.

It also varies depending on how much you earn.

But while you might be feeling the pinch now, you will be lining your pension pots for when you reach retirement age - and getting more from your employer too.

Aegon says that assuming investment growth, the increased contributions made by someone aged 22 could add up to a a pot of up to £450,000 by the time they're 68.

Aegon head of pensions Kate Smith said: “Extra employer contributions into a workplace pension is like a pay rise, and it’s unlikely anyone would turn that down."

The minimum contribution will rise again in April 2019 to 8 per cent overall, with employees having to pay in five per cent and employers chipping in three per cent.

You can opt out of the scheme though rather than have the money saved for retirement.

To do that you need an opt-out notice from your pension provider, to fill it in and then give it to your boss.

Your employer then has to refund all the money that's in your pension pot - though you can only do this in the first month after you've been opted in.

Aegon's Smith said leaving a workplace pension could be a "very expensive decision" in the long term.

She concluded: "The decision to opt out could end up costing workers up to £450,000 over their working lifetime, an enormous sum of money that would effectively be thrown away - why would anyone give up on money they're entitled to?"

Pensions are complicated to get your head around, with one in five working Brits facing retirement poverty because they have failed to save.

The national state pension age is set to rise to 68 by 2037 - here's all you need to know about saving.

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