A new report reveals that 58 per cent of people over the age of 21 have no idea how much their employer contributes to their pension
While employees have a better understanding of their own personal contribution, 43 per cent are still unsure how much they are setting aside each month, according to the survey carried out by Just Retirement. A further 35 per cent of those questioned didn’t know which company handled their workplace pension on behalf of their employer.
The survey also revealed that just under a third of employees (30 per cent) would not be able to identify how many private pension pots they had without reviewing the relevant paperwork. Meanwhile, almost one in five (19 per cent) were unsure whether or not their partner had a pension.
According to figures issued by the Institute of Fiscal Studies, 10 million private-sector employees now have a workplace pension – up from 4.6m in 2012.
“Employers contribute millions of pounds each month to employees’ pension schemes but this research suggests that while people are aware of this benefit, they don’t fully understand just how valuable it is,” says Stephen Lowe, group communications director at Just Retirement. “It is clear that in order for people to be in a position to manage their money well, they need to fully understand what, how and where they are saving for retirement.”
Lowe says it is crucial people make the most of free and impartial advice when it comes to understanding their pension: “With a significant proportion of people disengaged with at least some aspects of their retirement saving, it is vital that when they do reach retirement they make use of the impartial and free-to-use Pension Wise service.
“Making potentially life-altering decisions without receiving guidance exposes people to risks and decisions that may be irreversible. Those people using Pension Wise have said they received outstanding service,” he adds.
A total of 3,208 people responded to questions about their views on provisions for retirement.