Workers still unaware of pension auto-enrolment

| September 10, 2012 | 0 Comments
Workers still unaware of pension auto-enrolment

From next month, employers with 120,000 or more workers will have to automatically enrol workers into a workplace pension scheme, but more than half of workers are unaware that this will happen.

According to Scottish Widows’ Workplace Pensions Report, 52 per cent of workers remain unaware of the scheme, which will eventually be rolled out to all employers.

Auto-enrolment is being introduced by the government to help tackle the growing pension crisis in which many people are facing poverty in old-age.

Scottish Widows found that of the 5,200 adults it surveyed, staff earning under £20,000 were less well informed about auto-enrolment than higher paid staff.

Most employees who were aware of the scheme had found out about it through the media.

Lynn Graves of Scottish Widows said: “With just three weeks to go until auto-enrolment comes into force, it is shocking that there remains such a gap in awareness, and that the media has had to step in to play a pivotal role in educating people about these changes.”

The Department for Work and Pensions is launching an advertising campaign later this month, including television ads.

Nearly three quarters of those questioned by Scottish Widows said they thought their employer should provide financial advice or information about planning for their retirement.

According to the report, people are now happy to contribute around £77 a month to a workplace pension, compared with £38 a month, a year ago.

A separate report from Aviva, published in May, also found a lack of awareness among workers about auto-enrolment, with nearly 70 per cent knowing little or nothing about the scheme.

Up to five million workers are expected to be enrolled in a workplace pension as a result of auto-enrolment during this Parliament.

It will gradually be introduced into smaller firms, with firms employing fewer than 50 workers finally being brought into the scheme in June 2015.

Research by the Department for Work and Pensions suggests that auto-enrolment could help to double the pensions of the next generation of employees.

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