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But only 3% say they will opt out when contributions increase
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Almost a quarter (24%) of people still unaware of auto-enrolment
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22-29 year-olds twice as likely as the rest of the nation to save more into their workplace pension if they had more information from their employer
While awareness of auto enrolment is increasing markedly, from 39% in 2012 to over 76% in 2016, a quarter (24%) still remain unaware. Other statistics from the research revealed that over two-thirds (35%) of people working for large businesses and almost half (49%) of those working for medium businesses are not saving adequately for retirement.
However, the report also reveals that the number of employees from smaller companies now saving sufficiently has increased from 40% to 44% in the last year.
Over a quarter (27%) say that they can’t save any more into their workplace pension due to financial pressures. Younger generations, in particular, are most likely to be prevented from saving because of a lack of understanding, with a quarter (24%) of 22-29 year olds and over a tenth (13%) of 30-39 year olds giving this as the reason.
The younger generation (22-29 year-olds) are also twice as likely as the rest of the nation to save more into their workplace pension if they had more information from their employer (14% versus 7% on average). Furthermore, over a third (36%) of those aged 22-29 and 31% of 30-39 year olds think an employer who offers a pension scheme should also offer advice on how to budget for retirement.
Younger generations place a high value on employer contributions to their workplace pensions. Those aged 22-29 and 30-39 are the most likely of any age group to choose to save into a company scheme because their employer contributes too, at 60% and 58% respectively, with 26% of 22-29 year olds and 27% of 30-39 year olds wanting employer contributions to increase a little year on year.
David Holton, director of pension propositions at Scottish Widows, said: “Young people, in particular, appear disengaged with workplace savings but the good news is that they are twice as likely as the rest of the nation to save more if they had more information from their employer.
“As a result, the industry and employers alike need to continue encouraging all workers by providing them with ongoing support on the benefits of being more engaged with longer term savings. The Financial Advice Market Review aims to help consumers access such advice, presenting many opportunities for the industry. We should also be mindful of using advances in digital technology when it comes to plugging knowledge and engagement gaps, especially when it comes to younger workers. The longer these workers can save, the better their position will be when it comes to securing a financially stable income for later life.”
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