Nearly 70% of workers know “little or nothing” about the governments new auto enrolment pension scheme according to a new survey from Aviva. Despite an overwhelming majority of employers being aware of the pension scheme it seems most workers either a little or no knowledge whatsoever. The report entitled Aviva Working Lives argues that more needs to be done to bridge the consumer awareness gap over auto enrolment. It is estimated that up to 10 million workers will be placed on the scheme later this year, as the governments seeks to address the millions of workers with no pension provision. The scheme will initially start only with those companies with more than 120,000 staff from October the 1st this year. After this date the scheme will be phased in with medium sized companies and then with smaller companies after Match 1st 2014. One of the most remarkable findings from the survey was that despite a high proportion of employers being aware of auto enrolment plans, 11% of those who were aware admitted to having not made any plans for it’s introduction. On top of that 27% of those who were aware admitted to having not had any discussions about the legislative implications.
The survey also looked at job satisfaction rates and found that 27% of those questioned stated that they ‘really enjoy’ their job, with 45% stating that they ‘quite enjoyed’ it. However being surveyed in the work environment may have impacted on the answers here somewhat one could argue as evidence has shown that job satisfaction levels tend to be much lower than this in the UK. However the survey did find a majority of workers worried about rising living costs as well as overall job security.
One reason why auto enrolment is being introduced is because there are so many workers not saving into any form of private pension at all. It seems however that there will have to be a sea change in attitudes towards saving for retirement before this situation is reversed. This is backed up by the report’s claim that over half of employers do indeed offer a form of private pension but that 60% of workers are not enrolled into one. The main reason why workers are not making a contribution is because they cannot spare the cash at a time of stagnant wages, high inflation and high personal debt. Graham Boffe from Aviva said that…”…Britain’s employers are facing the significant challenge of transforming the way they provide pensions and workplace benefits at a time of continuing economic uncertainty.” Less than half of those questioned said they would remain in the pension scheme once enrolled, with a fifth saying they were undecided. Around 37% of employees are thought to drop out the scheme when it launches, something that will no doubt worry the government which is trying to implement universal private pension saving. The problem for many workers who are often on low pay is that they are already struggling to make ends meet and simply do not have the available money to put towards a pension each month. Aside from that you will also find a sizeable number of workers who will still remain blissfully ignorant about the need to save for a pension.