Thousands of savers miss out on up to £4.5k due to ‘common error’ by their employers – check if you’re affected

THOUSANDS of women may be missing out on significant amounts of money due to a “common error” made by their employer, new research suggests.

When women go on maternity leave, their employer should continue making pension contributions based on their full salary.

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However, a number of women have reported that they’ve been missing hundreds or even thousands of pounds.

Research provided to The Sun by Nugget Savings showed over 100 women said that their employer underpaid their pension contributions during their maternity leave.

In many of the cases, the women said their contributions were based on their statutory maternity pay rather than their usual salary.

And in some cases, the mothers reported that their employer had stopped contributing to their pension altogether.

Many of the women also said they had complained, but their employer or HR department had rejected their complaint and argued that they were only entitled to a percentage of their maternity pay.

Experts are now concerned this research could be “scratching the surface” of the issue and thousands of women could be owed money without realising.

How do pension contributions work?

If you join your company’s pension scheme, you contribute a certain amount of your salary every month and your employer contributes some too.

Under auto-enrolment rules – where you are automatically signed up to your company’s pension scheme – the minimum you can contribute is 5% of your salary, while your employer has to contribute at least 3%.

During maternity leave, your contributions are reduced to align with your mat leave salary.

However, your employer should continue to make contributions as if you were earning your usual full salary, up to 39 weeks.

But many women are finding that their employer is actually also reducing their contributions to base it on their maternity pay.

According to the research by Nugget Savings, women have reported missing up to £4,500 from their pensions due to the mistake.

Katie Guild, co-founder of Nugget Savings, told The Sun: “Last year, we posted a video on our social media where we raised awareness that women should still be paid their normal pension contributions based on their pre-maternity leave salaries – not a reduced amount.

“Since posting the video, which clocked up over 100,000 views, we have had hundreds of women get in touch to share how much they’d been able to claim back using our advice, with some recouping hundreds and others thousands of pounds.”

Harriet Morton-Liddle, co-founder of Nugget Savings, said that in some cases, women were rejected after reporting the issue – only to later learn they were in fact owed money.

“Not only were we shocked with how many women came forward just from our one video, but also the fact that companies, HR departments and payroll teams have in some instances rejected initial claims, only to dig deeper and see that these women are correct and owed money,” she said.

“The reality is, we’ve only just scraped the surface of this issue and we think in months to come, we’ll see this story unfold even further.

“This could be a national personal finance crisis on an unprecedented scale where women across the UK could be owed hundreds of thousands of pounds that should be in their pension pots, not in their employer’s bank account.”

Steve Webb, partner at pension consultants LCP and former pensions minister, said of the findings: “Where someone is on maternity leave their employer should carry on paying their full pension contributions for the first 39 weeks, as if they were still on full pay.  

“If employers are not doing this, they should be pointed to the law and asked to put things right. 

“Mothers already often suffer a pensions penalty over the course of their working lives, so it is all the more important to ensure that where contributions are due they are paid by the employer in full”.

What if I think I’ve missed payments?

If you think you might have been paid less into your pension than you’re entitled to, you should first gather all the information together.

Details of your pension can be found on your pay slip, and you should have been sent paperwork about them. If not, ask your HR department for help.

You should also gather all of your pay slips for before and during your maternity leave, as well as your pension statements. These can usually be found online or through your pension provider.

Ask your employer if you are not sure who provides your pension.

Then, compare your pension contributions from before you went on maternity leave to those made during the period.

Bear in mind that your contributions will be slightly lower, as your own contributions will be based on your lower salary.

However, if they are significantly smaller, it could be an error, in which case you should contact your employer to confirm how your pension contributions were calculated during your leave.