70% of workers 'unaware' of auto enrolment pension plans

http://www.guardian.co.uk/money/2012/may/02/workers-unaware-auto-enrolment-pensions

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Almost 70% of workers in Britain have little or no knowledge of the government's plan to automatically enrol people in their company pension scheme from 1 October 2012. The change to pensions legislation means millions of people who have so far not been saving for their retirement will begin putting money aside for the first time.

Up to 10 million people will be placed into schemes from this autumn, under government plans to tackle the pension savings crisis, beginning with larger companies. However, a survey by insurer Aviva found 68% of employees were unclear about the forthcoming changes.

This "consumer awareness gap" is a "critical challenge that will need to be overcome" if automatic enrolment is to gain momentum, Aviva said in its Working Lives report in which 2,000 employees and 200 employers were surveyed.

The report also found that only 43% of employees without a pension said they would remain in the scheme once they were automatically enrolled, while 21% were undecided. More than a third (37%) said they will definitely opt out – similar to the 33% of employers who believe their staff will do so.

Aviva spokesman Graham Boffey said: "The simple fact is that people are not saving enough for their retirement. [But] when the first companies start to automatically enrol their employees in October we can't expect an immediate step-change in how people save."

Aviva said automatic enrolment would have cost implications for companies, but the scale of any additional expense would depend on the size of the scheme and how many people dropped out. According to government estimates, between 2 and 4 million people will opt out of auto-enrolment, leaving between 5 and 8 million newly saving or saving more.

The Aviva report also looked at the benefits most valued by employers and their staff. It found that while 33% of employers thought a pension scheme was valuable, just 16% of staff said the same. This compares to 36% of employees saying an annual bonus is their most valued benefit.

Slightly more than half of employees (54%) said their employer offers a workplace pension. But when asked about six in 10 workers said they did not have one, with the main reasons for this being a lack of spare cash, debts to repay and other immediate family needs.