24 Aug 2012

Less than half of workers make regular pension contributions

Less than half of workers make regular pension contributions

Peter Mutch, Corporate Benefits Director, highlights a recent industry survey indicating that the government's auto-enrolment plans could be a positive step in the pensions of many.

Peter Mutch, Corporate Benefits Director, highlights a recent industry survey indicating that the government's auto-enrolment plans could be a positive step in the pensions of many.

Less than half of workers contribute regularly to a workplace pension scheme, a new study suggests.

In addition, 19 per cent of employees have no pension whatsoever, according to the research which was conducted by Friends Life.

Furthermore, 11 per cent of respondents said that while they do have a pension, they have no idea how much they contribute, while 35 per cent put away less than £100 each month.

A confused five per cent admitted they are unsure as to whether they have a pension or not, while three per cent did not know whether their employer offers a pension or whether they are already saving into it.

The results did indicate that the government's auto-enrolment plans could be a positive step in the pensions of many, with two-thirds saying they are not confident in their own abilities to save without governmental and employer support.

Almost half However, just 39 per cent believed they could save enough on their own without it being made compulsory by the government or being auto-enrolled by an employer.

That said, for some employees auto-enrolment will not be a welcome change, with eight per cent noting that they have declined to join their employer's pension scheme in the past.

In addition, many Brits said they have more pressing financial issues than pension saving, with 33 per cent pointing out that paying off debts is their top financial priority, while 15 per cent are concentrating on saving a deposit for a house.

Peter Mutch, Corporate Benefits Director at Aberdein Considine, said that the research showed many workers acknowledge that they need some encouragement when it comes to pensions saving.

"This is interesting news ahead of automatic enrolment in October and beyond. Auto-enrolment will provide a trigger to get many people saving into a pension that are not currently making any provisions for their retirement." 

"However, it is important to recognise the levels of contribution made under auto-enrolment may not be sufficient to provide the level of income in retirement that they want, and they may want to consider making additional savings to help them reach their goal."

Peter Mutch, Corporate Benefits Director


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