The majority of workers are worried about paying for their retirement with women much more anxious than men, according to a survey by the Charted Institute of Personnel and Development.
The survey also finds that most employees are unaware of the Government’s forthcoming pension reforms. Fifty-three per cent of men were worried about paying for their retirement compared with 65 per cent of women.
The CIPD’s Employee Outlook: Focus on Pay and Pensions survey says the auto-enrolment of workers into workplace pension schemes is the biggest reform to pensions for a century, yet 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 stating 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, the survey shows. 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.
Charles Cotton, the CIPD adviser for performance and reward, 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 and a half 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.
“Enrolling people into a workplace pension scheme is just one element of helping people pay for their retirement. We also believe that a move towards a non-means tested flat-rate pension would be beneficial to all, particularly as the removal of the default retirement age begins to take effect. Workers, employers and the Government all have an important part to play in the future of pensions.”