Workplace pensions: vote of confidence from employees
Over 90 per cent of people who have been placed into a workplace pension by their employer are staying in, according to research published by the Department for Work and Pensions (DWP). The findings give the first official indication of how well the government's automatic enrolment scheme, to get people saving for their retirement, is being received.
The survey of the 50 biggest employers shows that on average just 9 per cent of people have opted out. Previously, DWP research with workers across all business sizes found that 30 per cent were likely to opt out.
The findings also suggest that more young people are saving for the future, with more under 30s staying in a pension scheme than other age groups.
The duty of enrolling workers into a pension scheme started with the largest employers in October last year and will extend to the smallest firms by 2018. Automatic enrolment was introduced to address chronic under-saving with millions not putting aside enough for retirement, and only one in three private sector employees paying into a workplace pension.
Figures published by The Pensions Regulator in July 2013 that showed more than 1 million workers have been enrolled into a pension. By 2018 it is expected that between 6 and 9 million people will be saving more into a pension or join a scheme for the first time.
The Government says too few people have been saving for retirement and that the sooner people start a pension the better. The report is welcomed as showing that young people are keen to take charge and plan for their future.
It's not all rosy in the pensions garden though. Criticism of charges incurred by employees for workplace pensions prompted an investigation earlier this year by the Office of Fair Trading (OFT). Preliminary findings suggest 'some concerns about the way that certain parts of the sector function and the implications that this could be having for savers'. The OFT plans to discuss its concerns with the industry, the Government and regulators.
Acas runs training sessions on Human Resource Management for Beginners, covering terms and conditions such as pension entitlements. Acas also offers training on Age and the workplace, which offers an overview of management responsibilities on diversity and equality at work, including issues such as the retirement age.
Visit the Acas Training and Business Solutions page for more information.