Many employees may have received information about their pensions schemes from their employer during the previous year.

Since legislation was decided to make it a duty that employers give their employees access to a pension scheme and also make some contribution to that there is scope for quite a bit if change. However, despite the ramifications these changes could have on an employees later life, millions of people are apparently unaware of any changes to be made at all.


From 1 October 2012 the Government plans to automatically enrol employees into their company pension. Aviva has found that almost seventy per cent of workers have no knowledge of this impending change. These people should be made aware of what this means to them. The Government has been concerned about the lack of planning people have been doing for their retirement. This has been of greater importance since life expectancy has increased so much in the last decades. The change will mean that many people are putting money away for their futures for the first time.

In submitting their report, Aviva felt that there was an 'information gap'. This gap would need to be filled if auto enrolment into pension schemes is to gather any pace at all and stand a chance of really tackling the bigger problem. Two thousand employees and two hundred employers were surveyed for the report. It found that nearly half, forty three per cent, would remain in the pension once they were automatically enrolled in it. Twenty one per cent of those asked were undecided, perhaps due to their lack of knowledge or interest in the subject at present.

The Government is greatly aware of its duty to get these people interested. Inadequate savings for later life will place higher burdens on our welfare systems, public health care and generally reduce quality of life. Speaking on behalf of Aviva, Graham Boffey explained that "the simple fact is that people are not saving enough for their retirement." He added that "when the first companies start to automatically enrol their employees in October we can't expect an immediate step-change in how people save." This again highlights the need to ensure people are aware of the very real need to start saving now.

Of course there will be costs to employers who have to introduce the scheme. These costs will vary largely depending on the size of the company. The number of members who decide to leave the scheme will also impact the work involved and therefore associated costs. The Government has estimated that between 2 and 4 million people will opt out of auto-enrolment, leaving between 5 and 8 million newly saving or saving more.

At the moment it seems there is need for a fundamental cultural change, The report showed that only thirty three per cent of employers thought a pension scheme was of value and only sixteen per cent of employees agreed with this. Employees currently prefer short term rewards, with thirty six percent of them saying that a bonus was more valuable. Perhaps such an attitude is indicative of the times and the general austere environment. This makes the Government's challenge all the more difficult. Although fifty four per cent of those asked said their employers currently operated a pension scheme, six out of ten of the employees asked where not a part of it. The main reasons being that that money was more pressingly needed elsewhere, for example to cover debts. If employees do not realise the value of a pension then it is more likely that they will decide to pull out post October and this will lead to more administrative tasks and therefore cost for their employers.

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