The success of government pension reforms hangs in the balance as Britain’s cash-strapped workers say they can’t afford to save for retirement.
Almost half (45%) of the 4,720 public and private sector employees interviewed in Aviva’s Working Lives report blamed their failure to pay into a workplace pension on lack of funds.
Despite growing awareness and understanding of the benefits of pension auto-enrollment, which will see millions of employees contributing to a work pension for the first time, only a third of employees intend to take up the plan. An adamant 37% aim to opt out, while 28% are still unsure what to do.
These figures haven’t budged since Aviva’s first survey last May, despite double the number of people (59%) claiming they are aware of the changes and two-thirds admitting that it would encourage saving.
It’s vital that employers step up to the mark and create “compelling, relevant and personalised communications”, warned the report, in order to galvanise workers to plan for their retirement.
“Automatic enrolment will only become game-changing if employers, their advisers and the wider industry create sustained communications and engagement in the workplace to encourage employees to save,” said Mark Noble, Aviva’s managing director for health and corporate benefits.
While better communication and engagement will help, the biggest enticement for employees, mentioned by 55%, would be a pay rise. Yet many will be disappointed, as a third of employers, keen to keep a lid on remuneration costs, are looking at ways to motivate employees that don’t involve pay increases.
