EXCLUSIVE: Just 13% of respondents believe their employees are saving sufficiently for retirement, according to research by Wealth at Work.
Its Generating income in retirement 2013 report, which surveyed 104 employers, found that only 14% of respondents are aware of the various retirement income options.
Nearly two-thirds (65%) of respondents believe their employees do not understand what level of income to expect from their pension scheme at retirement.
The research also found that 46% of respondents believe pensions auto-enrolment has helped employees understand their retirement options, while 36% said it had not and 18% did not know.
More than half (54%) of respondents believe their employees are aware that, from April 2015, they will no longer have to purchase an annuity to convert their pension pot into retirement income, as announced in the Budget 2014 on 19 March.
The research also found:
- 23% of respondents believe their employees consider their total wealth as part of their retirement planning.
- 83% of respondents consider professional retirement planning education a critical need for their employees.
- 69% of respondents believe their employees are not making sufficient retirement savings through their pension contributions.
Jonathan Watts-Lay, a director at Wealth at Work, said: “These figures are shockingly low.
“As more employees retire from defined contribution (DC) plans, it is becoming ever more apparent that having a comfortable retirement is not just about the level of pension contributions, or the funds selected, but what is actually done with the pension pot when retiring, because this can significantly impact the level of income that is generated.
“It was welcome news in the Budget 2014 that, from April 2015, those retiring from DC schemes will be able to decide how they want to draw an income from their pension pot.
“However, increased choice and flexibility means that individuals need to understand the options available to them, the advantages and disadvantages of those options and, ultimately, what is the right thing for them to do on a personal basis.”
