When someone's about to go on maternity leave, they'll quite often look at trying to temporarily cut all unnecessary overheads. You might think that one sensible step would be to opt out of their employer's pension scheme for a while. Cutting this particular overhead is probably a very bad idea though.
If your employer operates their Automatic Enrolment pension scheme on the most common basis, you’ll be making a contribution each month, and so will they. Those contributions vary according to your income, and get capped if you’re earning more than £50,000 per annum.
If you go on maternity, your income drops, and so do your contributions. In fact, after the first six weeks of leave, from which point your salary will probably just consist of basic Statutory Maternity Pay, they’re likely to drop to zero.
But, crucially, your employer’s contributions do NOT reduce at all. They’re obliged to carry on paying into your pension pot at the level mandated by your normal salary! Other non-salary benefits work on the same basis, too; they can’t take away your company car or withdraw your medical insurance, for example.
So, by opting out at the start of maternity, an employee could lose nine months of employer pension contributions, whilst saving herself virtually nothing. A very easy trap to fall into!