Sixty eight per cent of people are unaware of upcoming increases to workplace pension scheme minimum contributions, Scottish Widows has revealed.

In its Scottish Widows Workplace Pensions Report, the firm found that despite a lack of awareness about contribution increases that will come into effect in the next few years, 78 per cent said that they will stay enrolled. Only 3 per cent said they will opt out of their scheme when contributions increase.

The report also highlighted a significant increase of auto-enrolment awareness from 39 per cent in 2012 to 76 per cent in 2016. However, 24 per cent are still unaware.

Furthermore, two thirds of people working for large businesses and just under a half, 49 per cent, working for medium-sized businesses were found not to be saving adequately for retirement. Employees of smaller companies, however, are now saving more sufficiently, with the number of adequately saving staff increasing from 40 per cent to 44 per cent in the last year.

Looking at the younger generation of 22 to 29 year olds, Scottish Widows found that they are twice as likely as the rest of the nation to save into their workplace pension if they had more information from their employer. A further 36 per cent of this group and 31 per cent of 30-39 year olds noted that employers who offer a pension scheme should also provide advice on how to budget for retirement.

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.”

Share Story: