British adults aged 60 and over could be missing out on nearly £2bn in retirement savings by opting out of workplace pensions early, a new study has found.
Although opt-outs from auto-enrolment pensions remain below 10% for the general population, the researchers found that this rises significantly to 23% among the over-60s.
With around 1.1 million people aged over 60 in full time employment, and with each standing to lose £7,000, this age group could collectively miss out on £1.75bn by opting out.
Royal London, which carried out the research, said there are many reasons why the over-60s opt out, for example, assuming that saving more won't make any difference at their age.
"It is understandable that someone at 60 might think it is too late to save enough to make a difference, but they are wrong," said Royal London pension specialist, Helen Morrissey.
"Our figures show older workers are throwing away thousands of pounds on retirement by opting out of their scheme."
How opt-out rates vary across age groups is shown below:
Royal London said that someone aged 60 on the average wage paying minimum pension contributions of 8% would amass a retirement pot of 13,980 by the age of 65.
Considering employer contributions and government tax relief, scheme members would only need to contribute £6,000 of their own money to achieve this outcome.
But by opting out, the researchers said they miss out on employer contributions, tax relief and investment growth that can significantly improve their retirement income.
"We would urge anyone thinking of opting out of their auto-enrolment scheme to think twice before doing so," Morrissey added.
