Pension contribution levels a mystery to many
Only 55% of Britons with Defined Contribution (DC) pension schemes know what they are contributing, while the other 45% are either contributing nothing at all, or have no idea how much they are putting towards their retirement income.
New figures from Scottish Widows also suggest that 38% of DC members don’t know how much their employer contributes to their scheme, although 70% expect their employer to provide access to a pension scheme and to make contributions.
Fifty-five per cent of those questioned even saw their employer’s pension scheme is an incentive to staying in their jobs.
The life assurer’s latest Workplace Pensions Report also reveals that the positioning the workplace pension as “deferred pay” could help improve employee engagement and increase awareness of pension benefits.
In the meantime, a lack of understanding of how much is actually being saved is likely to leave employees with unrealistic expectations of what will be provided at retirement.
Scottish Widows head of corporate pensions, Pete Glancy, comments: “Often pensions are seen as too complicated yet … positioning a company pension as ‘deferred pay’ could increase appreciation to the value of this benefit.”
He adds: “Auto-enrolment is just around the corner … and the level of success will depend on the effectiveness of the employee engagement in the workplace.”
Category: Insurance News
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