Over two thirds of employees (39%) are planning to increase their company pension contributions as the new pension freedoms are launched next week, according to Portus Consulting.
The employee benefits consultancy’s survey found that just 40 percent of respondents feel they are currently saving enough for their retirement through pensions, ISAs or property. Only 41 percent were aware of how much their employer will increase pension contributions as a result of the new legislation.
Stuart Gray, Chairman of Portus Consulting said:
“The pension changes have struck a chord with employees and plans to save more into pensions are to be welcomed.
“The issue however is that there is a lack of financial education and guidance with employees unsure about whether employers will match their increased contributions and just as worryingly the majority of employees admit they are not saving enough.
“Employers can play a major role in providing guidance for staff and see genuine benefits without having to make a major investment. There is clearly demand from staff for support with retirement planning and plenty of support available for employers who want to engage.”
The amount of employees intending to increase their pension savings has increased to 44 percent among those aged between 35 and 44.
However, 50 percent of workers say they are not saving enough for retirement and 11 percent admitted not saving at all.
Portus Consulting believes the mismatch between employee plans to save more and their understanding of contributions from employers coupled with the admission that workers are not saving enough underlines a need for companies to focus on financial education and guidance.
Changes to pensions mean that all retirement savers over the age of 55 will be able to take their defined contribution pension savings as cash subject to tax at their marginal rate, as well as giving them the chance to sell their annuity back to an insurer.
Steff joined the HRreview editorial team in November 2014. A former event coordinator and manager, Steff has spent several years working in online journalism. She is a graduate of Middlessex University with a BA in Television Production and will complete a Master's degree in Journalism from the University of Westminster in the summer of 2015.
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