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Employees unaware they’ve been enrolled into a pension

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
01/08/2018

Public awareness of automatic enrolment has been called into question after a survey revealed more than a third of employees didn’t know they had been nudged into saving for retirement. 

The Office for National Statistics’ Wealth and Assets Survey found that of the 37% of eligible workers who reported that they hadn’t been automatically enrolled, 91% were in fact members of their employee pension scheme.

The report revealed that during July 2016 and December 2017, 40% of adults aged under 60 were not in receipt of, or contributing to a pension, falling from 50% two years earlier.

The most common reason for not having a pension was their income was too low, they were not working, or they were still in education. Those aged 16-24 were the most likely to report not contributing to a pension due to these reasons.

Other reasons included they didn’t think they would live that long, that it was too late to start, it’s not something they’ve thought about or they don’t trust pension companies.

But the ONS found that 44% of employees thought employer pensions were the safest way to save for retirement, while for the self-employed, the figure stood at 42%.

Dave Harris, chief executive at equity release lender, more 2 life, said: “Once again these figures highlight the endemic issue of retirees not saving enough for retirement. Inadequate pension provision means an increasing number of older homeowners are entering retirement with the need to borrow in order to supplement their income or pay off debt such as credit card loans.”

Tom Selby, senior analyst at AJ Bell, said: “Poor engagement risks leading to poor decisions – or no decision at all – resulting in an increased likelihood of poor outcomes in retirement. Addressing this engagement gap now needs to become a central priority for policymakers across regulators and Government.”