Employees not saving enough for retirement

Nearly six in ten (56%) employees are concerned they are not saving enough for retirement.

According to the Employee Outlook: Focus on Pensions survey by the Chartered Institute of Personnel and Development (CIPD), more than half (54%) of employees are not members of a workplace pension scheme.

The survey also found there a higher proportion of private sector workers (65%) do not saving into a company pension scheme, compared to the voluntary (40%) and public sector (12%).

In addition, around one-fifth (18%) of employees are not aware of how much their employer contributes on their behalf.

Meanwhile, almost a third (27%) of public sector workers are unaware of their own contributions, compared to 11% in the private sector and 16% in the voluntary sector.

When asked what would encourage them to save more, 44% of employees stated knowing the size of the pension pot they would have to achieve in order to retire comfortably, while 39% said information or advice about the amount they would need to save each month would be encouraging.

Nearly one in three (28%) said regular updates about the value of their pension would encourage them to save more.

Charles Cotton, reward adviser at the CIPD, said: “Firms are facing a huge challenge in light of 2012 auto-enrolment.

“It is crucial the government supports employers’ efforts to communicate to employees the implications of these changes. If not, we will continue to sleepwalk into a pensions’ crisis.

“There is a real danger that, without government support, 2012 auto-enrolment will prove to be a missed opportunity in achieving a step change in the uptake of pensions.”

Read more articles on auto-enrolment and the 2012 pension changes