Ten million workers in the UK will now see a bigger chunk of their wages automatically diverted to a pension, starting with their next pay packet.

New rates taking effect on Saturday mean employees, employers and the government will all contribute more to these pension pots.

That will mean less take-home pay for many people who are automatically enrolled into a workplace pension.

However, workers have the option of opting out of the scheme at any time.

This creates a choice between saving for the future or taking money now.

What is happening?

Ten million people aged 22 and over, who earn more than £10,000 a year and who were not already in a company pension scheme, have been automatically enrolled into saving for old age through a scheme which began in 2012. More will be enrolled in the future as they start work or new jobs.

This latest change marks the final increase in contribution rates designed under the scheme.

For someone earning £30,000 a year who is in an auto-enrolment scheme, the change means putting an extra £32 a month from their pre-tax pay into their pension pot.

But any dilemma on whether to continue with these contributions or opt-out of contributing to a pension has been eased by a tax cut which also takes effect from now. More than 30 million people now only have to pay income tax on earnings above £12,500 a year, rather than above £11,850.

Analysts also say that by choosing to opt-out of this automatic pension saving, workers would actually lose out on the money their employer puts into their pension pot.

“Anyone who chooses to opt-out is basically taking a voluntary pay cut,” said Tom Selby, of senior analyst at investment company AJ Bell. “If you turn down the matched contribution [from an employer] you won’t get it back elsewhere.”

Why do analysts say women face tougher choices?

Women are more likely to work part-time, and typically earn less – a so-called motherhood penalty. That means the pension contribution change could have more of a noticeable impact in terms of pounds and pence.

For example, someone earning £20,000 a year will see their contribution to a pension rise from £335 to £555 a year.

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But for London hairdresser Chloe Cornwall, the long-term gain outweighs any short-term financial pain.

“This is a little bit of money that goes straight out of my wages before I even see it, that is for the future when I might need it,” she said.

There has also been some criticism of the system, as many women who work part-time do not earn the £10,000 a year required to qualify for these automatic pension contributions.