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Majority of UK workers ‘in the dark’ over pension reforms

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A major overhaul of the UK pension system is less than 12 months away, yet 53% of current workers claim they are totally unaware of what the reforms will entail, according to research from the Chartered Institute of Personnel and Development (CIPD).

From 2012, reforms will mean that workers are auto-enrolled into workplace pension schemes. However, the CIPD’s Employee Outlook: Focus on Pay and Pensions survey found that awareness of the reforms is worryingly low.

Among the 18-24 age group, just 31% of private and voluntary sector workers are aware of the changes, increasing to 40% among the 25-34 age group.

“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,” said Charles Cotton, the CIPD adviser for performance and reward.

“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.”

If you’ve got questions about your pension or any other work related benefits, seek advice from your HR department before the 2012 changes come into effect.

Written by Andrew Hodges

September 6, 2011 at 5:34 pm

Posted in Comment, LinkedIn

Tagged with , ,

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