Workplace pensions ‘the safest way to save’ for retirement
Paying into an employer pension scheme is considered the safest way to invest for retirement, according to preliminary results of a survey published in November.
The Office for National Statistics (ONS), who carried out the survey, said between July 2014 to June 2015, 41% of people considered this option as the safest method for retirement.
The survey, which polled around 10,000 members of households in Great Britain, also reported investing in property was considered the second safest method, as cited by 28% of respondents.
Stocks and shares were considered the least safe method of saving for retirement, with less than 5% of respondents citing this option.
However, when asked which method of saving for retirement would be likely to make the most of their money, 44% said investing in property while 25% chose workplace pensions.
Almost half (49%) of participants ‘strongly agreed’ or ‘tended to agree’ they had enough understanding of pensions. But when it came to reforms such as auto-enrolment, nearly four in 10 ‘knew a little’ and 25% ‘had heard of’ policy changes but ‘knew nothing’ about the programme.
Of those currently not contributing to a pension, 50% said ‘low income, not working, still in education’ as the main reason for not paying into a scheme.
Trade Union Congress (TUC) general secretary Frances O’Grady said: “The living standards crisis for low-income workers has not abated and for millions will continue well after they have retired. If no action is taken income inequalities in working life will be replicated in retirement.
Today’s figures show the importance of bringing low-paid workers into workplace pensions so they too can benefit from employer contributions. We cannot afford to have a whole swathe of society not saving for their future.
The survey is part of a two-year research which will include data covering the period July 2014 to June 2016. Finalised results are due around December 2017.
Petaurum Solutions’ Comment
Interesting research, which highlights that employers need to do more than simply ‘tick the box’ if they want to maximize their investment in Auto Enrolment compliance. Do you want to “engage or comply” is the key question that needs to be answered in order to drive your approach to implementing Auto Enrolment in your business. If it’s only about ‘ticking the box’ you are less likely to see employees really engaging in saving for their retirement and unlikely to see employee’s viewing your pension scheme as an attractive feature of working for your business. Taking a more rounded approach that will drive engagement in and loyalty to your business as well as helping employees understand how they should invest in their retire could be a real win/win.
However, we do understand that complying with complex Auto Enrolment obligations can be a daunting prospect for many small and micro-sized business. Choosing a cost effective, long-term implementation solution is critical for these businesses to ensure they do not become swamped with the processing requirements and responsibilities that Auto Enrolment can bring. Therefore, for businesses considering their solution, focus should not only be on the pension scheme, but also on how it will be administered, methods to communicate, impacts on systems and data collection processes along with any HR and Legal changes may you need to make.
Our Defaqto 5* quality Carey Master Trust Pension Scheme, comes with best in class assessment and communication software and is part of our SME specific, competitively priced end-to-end solution that will take care of the above, leaving you free to manage your business safe in the knowledge that your Auto Enrolment obligations are in professional hands. Want to know more? Then feel free to download our info pack here, or contact us to secure your PAE future.
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