Workers are clueless on auto-enrolment of pensions

 

A half (48%) of UK workers have not been sufficiently informed about auto enrolment by their employers according to new research from Office Angels.

Two-thirds (66%) of employees either don’t understand or only partially understand what auto enrolment actually is or how it will affect their salary. And with almost four in ten (38%) workers neglecting to regularly check whether they have been paid correctly, a significant proportion may not even notice that pension payments have been taken.

Overall, the research revealed a lack of understanding amongst workers: a third (31%) believe that annual income is the only factor which affects pension payments. Only half (50%) of workers understand that auto enrolment is beneficial for their future and standard of living when they retire

The research also found:

  • 40% of workers from companies of between 101-250 employees have still not been informed by their employers of the changes, whose staging date is just four months away in April 2014
  • More than half (55%) of UK workers wouldn’t bother with a pension if it weren’t for auto-enrolment
  • 40% of workers wouldn’t know who to approach if they wanted to discuss any issues related to auto enrolment
  • Over a third (36%) of workers do not know how much they will need to pay into the scheme

Angela Smith, managing director of Office Angels, said, “A shift is needed in attitudes towards pensions in the UK. HR professionals need to take the necessary steps to prepare workers for the change in pension auto enrolment — otherwise, they risk damage to their employer brand, a drop in overall engagement levels, and a breakdown of the relationship they’ve built with their employees.

“Employers must demonstrate long-term commitment in their staff, and help them to take the necessary steps to prepare for a longer future of working. As businesses can no longer use their pension scheme solely as a way to distinguish themselves amongst competitors, they also need to think creativity as to how their benefits package can stand them apart.”

For more information

In order to help guide you and your employees through the changes, Office Angels are hosting a series of morning seminars for local employers. In conjunction with Capita Employee Benefits, expert speakers will discuss the requirements of auto-enrolment, the legal obligations for employers and the risk of getting it wrong.

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