Employees are not prepared for retirement
Oct 09 2009
Employers need to encourage staff to learn about pension schemes before it's too late, claims a report.
Less than a third (28 per cent) of private sector employees know how much they should be saving for a comfortable retirement, with more than half (56 per cent) worried they will not have enough, according to a report by the Chartered Institute of Personnel and Development (CIPD).
Charles Cotton, CIPD adviser, says: ‘This research clearly shows that employees and employers are sleepwalking into a potential retirement disaster. Many employees are planning to rely on downsizing their home, family hand outs or government to support them in retirement, while employers will face the prospect of trying to motivate an older workforce who are simply soldiering along because they cannot afford to retire.’
Of the 840 private sector workers interviewed, 31 per cent cite financial constraints as a main reason for not saving into pensions.
In 2012 all employers will have to automatically enroll their staff into a pensions contribution plan, with employer contributions risingfrom 1 per cent in 2012 to 3 per cent in 2016.
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