A solution to the pension crisis will not be found in fools’ paradise, warns the Chartered Institute of Personnel and Development (CIPD).
Last month, Adair Turner’s report revealed that Britain should be saving £57 billion more a year to plug the pension shortfall.
Charles Cotton, Pensions Adviser at the CIPD has spoken out against the authorities who he says are living in a fools’ paradise if they believe the pensions’ crisis is going to be solved by abandoning means tested benefits and increasing the state pension.
Calling for a greater focus on pensions communications, based on evidence that employers are not doing enough to promote this employee benefit, Charles Cotton said:
“If the government and MPs think that abandoning means tested benefits for the state pension is going to lead to a stampede of the un-pensioned rushing to join occupational or private pension schemes then they are living in a fools paradise.
“The issue is far more complex than that. People aren’t joining occupational or private pensions for a whole raft of reasons. Many don’t understand pensions, don’t want to understand pensions, don’t trust pensions, have other spending priorities and simply don’t believe pensions are for them.”
The key said Cotton is better communications, education and trust:
“CIPD research shows that while nearly nine out of ten employers tell staff about pensions during their recruitment and induction process, less than half update staff about their pension arrangements on an ongoing basis. Employers are failing to communicate effectively after recruitment, which means that the full value of their rewards package is not appreciated, and yet another opportunity to educate employees about full importance of issues such as saving enough for their retirement is being missed.”
His comments come as Adair Turner, is quizzed by MPs sitting on the Parliamentary Work and Pensions Committee.
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