Staff Want More Pensions Advice at Work
More than half of employees would like guidance on pensions at work, research has found.
A MetLife survey of 1,400 adults revealed that four out of five workers would welcome guidance in the workplace on pensions. But only 17 per cent said they would like to receive advice from their employer, with the majority (55 per cent) preferring to speak to an independent financial adviser (IFA) about their plans. Just 9 per cent wanted to receive advice from the Government.
However, nearly a fifth didn’t want any advice at all, suggesting they were already aware of their options or that they did not want to tackle the issue. The research also highlighted that almost half of adults were not saving into a pension fund at all.
The findings come ahead of the Pensions Act 2012, which will automatically enrol employees into pensions from next October. The changes mean that employees will have to actively opt out if they decide they do not wish to save into a workplace arrangement.
Phil McCabe, spokesperson for the Forum of Private Business, said that business owners would be concerned about “extra admin and costs” if it became a requirement to provide pension information at work.
“The red-tape burden on small firms is already significant,” he said. “Bringing in external providers like IFAs to talk about pensions could raise cost issues for small firms struggling in the current climate.”
The Act will oblige employers to enrol all eligible staff ― those who earn more than the minimum earnings threshold, currently £7,475, and are aged between 22 and the present state pension age of 65 ― automatically into a pension scheme and contribute towards their retirement.
Employers will be required to make a minimum 3 per cent contribution to the jobholder’s pension. This will be further supplemented by a contribution from the jobholder and approximately 1 per cent contribution (in the form of tax relief) from the Government.
Businesses are not required to provide a workplace pension scheme under current law, although businesses with five or more employees are obliged to offer access to a stakeholder pension.
The changes have been introduced by the Government in an attempt to tackle the threat of a so-called pension crisis, brought about by an ageing population with insufficient retirement savings.