As the UK continues to ease Covid-19 lockdown restrictions and more employees return to work, the debate about the future of work goes on. If the move to more flexible arrangements continues, the impact on retirement planning could be greater than expected.

The most obvious point is that if people work fewer hours – because they choose to shift to part-time working, for example – they will almost certainly be paying less into their pension. Under the auto-enrolment pensions system, both employees and employers have to pay a minimum percentage of pay into pensions. If your earnings reduce, so will the cash going into your savings. Inevitably, that means a smaller pension fund when you reach retirement.

Moreover, many people do not realise that there are minimum levels of earnings to qualify for auto-enrolment. If your salary drops below £10,000 a year, your employer does not automatically have to enrol you in its occupational pension scheme. That could see you missing out on workplace pension contributions altogether.

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This can be a real headache for the growing number of people with several part-time jobs. If each of them pays less than £10,000, they may not receive any pension benefits at all even if, in aggregate, they are earning well over the threshold

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