Only 11 per cent of employees intend to opt out of workplace pensions they have been automatically enrolled into, according to new research carried out by Scottish Widows.
Affordability is the most common reason employees expect to opt out, cited by 32 per cent of those expressing that view, followed by 19 per cent who thought they would get their pension through some other means, and 18 per cent saying the government should pay for their retirement.
The report found respondents over 55 years of age are less likely to stay enrolled than other age groups, perhaps due to their closer proximity to retirement. More full time workers think automatic enrolment is a good idea compared to other groups, perhaps due to their higher level of earning.
The Scottish Widows Workplace Pensions Report 2012 also found that 52 per cent of workers – equivalent to 9.9million people in the UK – are completely unaware of the impending changes.
It also found an increasing acceptance of how much needs to be paid into a plan to secure a decent retirement. Last year the average amount respondents were willing to pay was £37.50 per month, but this year it almost doubled to £76.95. But a third of respondents feel this level of contribution would not provide them with a comfortable retirement.
Scottish Widows head of Business Development, corporate pensions Lynn Graves says: “It is clear from our research that people are failing to save enough for their future especially in relation to retirement. While it is a positive sign that people are willing to pay more into their workplace pension, substantial work must still be done to encourage people to save enough for retirement and this is a challenge for government, the pensions industry and employers. As a nation we are slowly waking up to the reality of how we are going to be able to fund our retirement, many people recognising that they can’t solely rely on the State to provide the majority of their income in old age.
“With just three weeks to go until auto-enrolment comes into force, it is shocking that there remains such a huge gap in awareness, and that the media has had to step in to play a pivotal role in educating people about these changes. Auto-enrolment is designed for people who traditionally don’t have access to a workplace pension scheme, such as smaller employers or those with lower incomes, and it is clear that information is still not reaching the audience it’s intended to target. Educating these employees needs to be a top priority for the industry and the government.”