Game-changing pension reforms will help the UK save more

The National Association of Pension Funds (NAPF) welcomed the start of pension auto-enrolment today, and released new research underlining the importance of the new rules.

Joanne Segars, NAPF Chief Executive, said:

“This is a game-changer that will get millions of people saving for their retirement. The UK is drifting towards an iceberg when it comes to paying for its old age, and we need radical reform like this.

“Things have got to change. Less than half the workforce is saving into a pension and, without auto-enrolment, millions would end up scraping by on the state pension alone. Putting everyone into a workplace pension will help reverse years of decline in retirement saving.

“Crucially, this reform will reach those who have no pension – the young, the low-paid, and those working for small businesses.

“Some people might think about quitting their new pension, but we urge them to stick with it and get saving for their old age. Leaving the pension would mean losing tax breaks and employer contributions which are, in effect, ‘free money’.

“It’s important that people are put into well-managed, high quality pensions that offer good value for money. We have to bolster faith in the system, and there’s no point bringing workers into a bad pension which they then turn their backs on.”

Starting today, there are new duties on employers to put their staff into a workplace pension scheme. This process is called automatic enrolment and is being rolled out gradually across UK employers.

New research for the NAPF run by pollsters Populus shows that, of those in employment:

• 9 in 10 (89%) believe that every worker should be entitled to a workplace pension.

• Less than half (46%) are members of a pension scheme at work, and a third (32%) work for an employer that does not offer a pension.

• Only a quarter (24%) of those earning £14,000 or less are saving into a pension scheme at their workplace.

• 2 in 3 (65%) say they are likely to stay in their new pension.

Of those who say they are likely to stay in their new pension:

• 87% think auto-enrolment makes it easier for people to save.

• 73% say that a pension is a good option because interest rates on ISAs and savings are so low.

• 87% say the state pension alone will not be enough for them in retirement.

The statistics are drawn from a survey for the NAPF by Populus. The survey asked 979 respondents who were in employment and was conducted from 14 to 16 September 2012.

 

Notes to editors:

1. Spokespeople from the NAPF are available on Monday 1 October for broadcast interviews to discuss the new pension reforms.

2. The NAPF is the leading voice of workplace pensions in the UK. We speak for 1,300 pension schemes with some 16 million members and assets of around £900 billion. NAPF members also include over 400 businesses providing essential services to the pensions sector.

Contacts:

Paul Platt, Head of Media and PR, NAPF, 020 7601 1717 or 07917 506 683, [email protected]

Christian Zarro, Press Officer, NAPF, 020 7601 1718 or 07825 171 446, [email protected]