More than half of Londoners working for private companies and in the voluntary sector are unaware of the reforms being made to pensions next year, according to research.
Some 56 per cent of workers in the capital did know they would be automatically enrolled into workplace pension schemes, the Chartered Institute of Personnel and Development (CIPD) found. The group said the reforms are the biggest changes to be made to pensions for a century.
Despite most workers being unaware of the changes, a fifth (19 per cent) of workers in London strongly agreed when asked if they are worried about their financial plans for retirement, while four out of 10 agreed with the statement. Less than a fifth (17 per cent) of London workers are satisfied with their financial plans for retirement.
“The danger is that a cheap and cheerful one-size-fits-all communication approach could end up costing the Government more in the long term through a lower understanding and appreciation of retirement savings”
Charles Cotton of Chartered Institute of Personnel and Development
Charles Cotton of CIPD said: “These findings suggest that both the Government and employers need to take a nuanced approach to communicating pension reforms to employees. With less than a year to go, employee awareness is generally quite low.
“From our survey we can see the greatest challenge to communicating the reforms is among the young. A more targeted effort in communicating the changes to this group is needed to ensure they understand how the reforms will directly benefit them.
“The danger is that a cheap and cheerful one-size-fits-all communication approach could end up costing the Government more in the long term through a lower understanding and appreciation of retirement savings.”
The CIPD’s research found only four per cent of people working for private firms and in the voluntary sector in London believe their current and planned pension provision will allow them to live more than comfortably when they retire.
About a fifth (19 per cent) say their current plans should be enough to see them live comfortably, while a quarter (23 per cent) say they will have enough to get by. However, 18 per cent do not believe they will have enough money to live comfortably, while 21 per cent have no financial plans for retirement.
A Department for Work and Pensions spokesman said: “We know that many people find pensions confusing and that can stop them from saving. We have already published a language guide to make pensions jargon-free and easy to understand so people don’t stop at the first hurdle.
“We are working with industry and consumer organisations on a substantial communications campaign to ensure people are aware and understand how automatic enrolment can help them secure their future.”