The country's largest employers will begin automatically enrolling staff into workplace pension schemes in two weeks' time. But Jenna Towler discovers millions of people are still unacquainted with the idea.
Millions of workers will start paying into a workplace pension for the first time in two weeks, when the government’s long heralded auto-enrolment scheme begins.
The country’s largest employers, Tesco, Asda, Sainsbury’s and Morrisons, are scheduled to start complying with the new rules first. Companies in ascending size order will then gradually fall under the rules, with the micro end of the market given the most time to prepare.
It has been a long time in the planning; Lord Turner brought it up in his 2005 report. However, a report from pension provider Scottish Widows, released on Monday, has found just under ten million workers – about half the working population – still don’t know what is coming.
The first phase of auto-enrolment begins in a fortnight, so why do so few people know about it?
The firm’s Workplace Pensions Report 2012 found 52% of employees are completely unaware of the changes. This is in spite of a general increase in the average amount people are willing to contribute to a pension – acceptable monthly contributions have doubled since last year from £37.50 to £76.95.
The report found the ‘alarming’ lack of awareness was particularly prevalent in the programme’s target market – people earning under £20,000. A third of these lower paid workers were aware of the changes.
Scottish Widows also said it was “worrying” that just 16% of workers who knew what was coming had found out about it from their employer. Just over 61% said they had found out through the news.
The Department for Work and Pensions (DWP) has run an advertising campaign about auto-enrolment but Scottish Widows said there was a clear need for more communications and education from industry, employers and government.
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