Nearly seven in 10 (68%) of people are unaware that over the next few years there will be increases to the minimum contributions they will have to make into their workplace pension scheme, according to the latest Scottish Widows Workplace Pensions Report. But despite this lack of knowledge about the mechanics of the initiative, nearly four in five (78%) say they will stay enrolled, with only 3% saying they will opt out when contributions increase.
While awareness of auto enrolment is increasing markedly, from 39% in 2012 to over 76% in 2016, a quarter (24%) still remain unaware. Other statistics from the research revealed that over two-thirds (35%) of people working for large businesses and almost half (49%) of those working for medium businesses are not saving adequately for retirement. However, the report also reveals that the number of employees from smaller companies now saving sufficiently has increased from 40% to 44% in the last year.
Over a quarter (27%) say that they can’t save any more into their workplace pension due to financial pressures. Younger generations, in particular, are most likely to be prevented from saving because of a lack of understanding, with a quarter (24%) of 22-29 year olds and over a tenth (13%) of 30-39 year olds giving this as the reason.
The younger generation (22-29 year-olds) are also twice as likely as the rest of the nation to save more into their workplace pension if they had more information from their employer (14% versus 7% on average). Furthermore, over a third (36%) of those aged 22-29 and 31% of 30-39 year olds think an employer who offers a pension scheme should also offer advice on how to budget for retirement.
Younger generations place a high value on employer contributions to their workplace pensions. Those aged 22-29 and 30-39 are the most likely of any age group to choose to save into a company scheme because their employer contributes too, at 60% and 58% respectively, with 26% of 22-29 year olds and 27% of 30-39 year olds wanting employer contributions to increase a little year on year.
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