The biggest UK pensions change in decades remains a mystery to 10 million workers, the latest Workplace Pensions Report from Scottish Widows has revealed.
Auto-enrolment is due to begin for the UK's largest businesses in just three weeks' time, yet the equivalent of 52 per cent of the UK's working population claims to be completely unaware of the changes.
The plans to auto-enrol workers into a workplace pension scheme have long been underway in response to a lack of saving for retirement, particularly by lower earners. The rules mean that both the employer and the employee must contribute to the eligible pension scheme, and the danger is that many workers may opt-out if they are not prepared to start contributing towards their retirement fund.
Commenting, Tom Jones chief executive officer at the National Employment Savings Trust (NEST) said: "There is a risk some people will opt out when it may not be in their interests if this comes as a surprise."
Despite the lack of awareness of auto-enrolment, the report does reveal that the amount that workers are prepared to save for retirement has doubled in the last 12 months, from £37.50 to £76.95. The increase could represent a shift in people starting to take more responsibility for their retirement.
Commenting on the report, Lynn Graves, head of business development, Corporate Pensions at Scottish Widows said: "While it is a positive sign that people are willing to pay more into their workplace pension, substantial work must still be done to encourage people to save enough for retirement and this is a challenge for government, the pensions industry and employers. As a nation we are slowly waking up to the reality of how we are going to be able to fund our retirement, many people recognising that they can't solely rely on the State to provide the majority of their income in old age."
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