The People Bulletin

The auto-enrolment of workers into workplace pension schemes is the biggest reform to pensions for a century. The extent of the government’s communication challenge is highlighted by the CIPD Employee Outlook: Focus on Pay and Pensions[1] survey, where over half (53%) of UK workers state that they are totally unaware of the reforms.

The survey reveals that the auto-enrolment pension reforms – which are due to come into effect in October 2012 – will have the greatest impact on the private and voluntary sectors, with 46% and 42% respectively showing awareness. Among the private sector, those working in the finance sector (57%), followed by construction (54%) and professional services (50%) are most aware of the reforms.

Awareness of the reforms increases with age, but percentages are still low. Among the 18-24 age group, just three in ten (31%) of private and voluntary sector workers are aware of the changes, increasing to two in five (40%) among the 25-34 age group. The employees most aware are those aged 55 and over (57%) and those between 45-54 years of age (45%). A similar pattern is found by level of seniority, with those in non-managerial roles being less aware than those in managerial roles. 

Commenting on the survey, Michael Slade, managing director of employment law specialist Bibby Consulting & Support[2], said:

 "With the recent removal of the default retirement age and various proposals to reform pensions, it is hardly surprising that employees are confused about what their future options are. However, we are extremely concerned that more than half of them don't know that auto-enrolment into company pensions is becoming mandatory on a phased stage basis, over four years, from October 2012.

“The Pensions Regulator is writing to all employers around 12 months before their staging date so that they know when to enrol their eligible jobholders automatically. Three months before the employers' staging date the Regulator will write again to remind them of the new duties and the need to register but we would encourage all employers to start thinking about these things immediately.

"We would advise all companies to make it a priority to give their employees the very latest information on their pension commitments."  

Other findings included:

• 59% of employees are worried about paying for retirement.
• Women (65%) are more anxious about where the money will come from to pay for their retirement than men (53%).
• Those working for the private and voluntary sectors in Wales (35%) and the North West (43%) are the least aware of the pension reforms.

www.cipd.co.uk

[1] The full survey can be viewed here.

[2] www.bibbycas.com