Research shows around 1.5 million employees are oblivious to their pension scheme choices
According to new research by Aviva, around 1.5 million employees are unaware of their pension fund choices or have never reviewed their investments.
In addition, a staggering 19% of employees in small businesses are not aware of their pension choices, with 15% of those paying into a defined contribution pension scheme not knowing their funding choices or reviewing them. This is almost double the 9% who claimed ignorance over such matters back in 2013.
There is also a worrying decrease in the amount of employees seeking financial advice – a 3% drop since 2013. These figures point to the fact that in the three years since Auto Enrolment was rolled out, employees have become less aware and are taking less of an interest in their financial futures.
This is a concerning conclusion. With life expectancy ever increasing, making sure you are sufficiently saving for retirement is of utmost importance. According to Aviva’s research, 19% of employees would rather use their cash to find their current lifestyle over their retirement. 20% do not feel their employer has explained Auto Enrolment in a way they could understand.
Andy Curran, Managing Director of Corporate and Business solutions at Aviva, said: “it is vital employees engage with the processes behind their pension. We must continue to make every effort to ensure people have all the support they need to make the most of their pension provision.”
It seems a wave of effort on both sides of the workplace needs to be exerted. Employers have an obligation to keep their employees informed about their workplace pensions. Likewise, employees need to take a reciprocal interest.
If you’re a business owner, employee or simply at a loss when it comes to Auto Enrolment and pensions, then please give our Hove office a call on 01273 208813. IEP Financial are experts in workplace pension schemes and have a team of specialists to cover this area of advice. We offer an initial consultation at our cost with no-obligation. Alternatively, you can email us your query at [email protected].
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