'It could cost me £10k but I need the money now': Why Gen Z are opting out of pensions

Until early September, Hassan Nassar, 26, was saving around £430 every month into his NHS workplace pension.

But the trainee GP, who works in the West Midlands, says he was "really cash strapped" and decided to stop putting money aside for around "six to 12 months".

He needs the money to help take care of a sick family member, save for his first home and cover rent and student loan repayments.

But he's aware there is a cost to opting out, estimating he could lose between "£5,000 and £10,000" in future retirement income due to the decades of compound interest he will miss out on by not saving now.

"People will say, you're silly, look at what you'll be missing out in the future," he tells the BBC. "But I need to look at what I'd be losing now if I didn't opt out."

All employees will be automatically enrolled , external in a workplace pension if they are aged 22 or above and earn over £10,000, although there are exceptions.

A percentage is taken directly from the worker's pay - usually around 5% - with tax relief added on top, and the employer must also pay a minimum contribution on top.

But a growing number of Gen Z and millennials are opting out of these schemes due to cost-of-living pressures and the government has warned they could be on track for lower private pension incomes than people retiring today.

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