DC plan members fail to take up matching contributions

Nearly 40% of defined contribution (DC) scheme members are failing to take advantage of matching pension contributions offered by their employers, equating to a loss of up to £225m per annum..

The Market for DC Pensions research by Xafinity Consulting also said that the low take-up of matching contributions indicates more financial education is needed, and could be a factor of low disposable income at a point in an individual’s life cycle when outgoings are relatively high, for example, when paying off student debt.

Pat Wynne, director at Xafinity Consulting, said: “Individuals need to be encouraged to think about the level of income they will require in retirement, making use of modelling tools to calculate how much and when to save, taking into account their attitude to risk and when they wish to retire. This may, in fact, mean making contributions greater than the employer is prepared to match.”