After a year which has transformed the UK pensions landscape with the introduction of automatic enrolment, research from Scottish Widows has revealed opt-out rates at a lowly 8%, compared with initial industry estimates reaching as high as 30%.
Awareness of auto-enrolment has increased substantially from over a third (39%) of employees in 2012, to almost two-thirds (65%) this year.
Employers have clearly played a pivotal role in this heightened awareness, with 26% of people saying they found out about auto-enrolment from their employer, in comparison to 16% who said this last year
In addition, employers are committed to getting the best deal for their staff, with a third (34%) of employers saying they would be willing to pay an additional 1% of payroll to ensure that staff at least get their money back when they invest in a pension, and almost a fifth of employers saying they were open to paying for advice to ensure they have the best scheme for their staff.
Despite these positive messages however, there remains a number of areas for improvement that have been highlighted by the annual Scottish Widows research, including:
– Communication around workplace pension schemes remains poor, with almost half of employees (44%) not aware how much their employer contributes
– Fewer than one in five employees (18%) would go to their employer for advice about pensions, behind the FCA website (20%), pension providers (21%), friends and family (24%) and independent financial advisers (25%)
– Awareness remains particularly poor amongst those at whom the scheme is targeted, with one in five (21%) employees on an annual income of under £30,000 still not aware of the changes.
For independent financial advice on your pension contact Integrity ifa now on 01316530588.
