One in four employees do not know how much they pay in to pensions

Pensions

One in four employees do not know how much they contribute to their workplace pension fund, and many are unsure about how much they should be saving for an adequate retirement, according to research by Scottish Widows.

The Scottish Widows pensions report, which surveyed 5,200 UK adults, also found that one in three workers believe employers which offer pensions should also offer full financial advice and guidance.

Fewer than one in five would currently turn to their employer for guidance on retirement planning, while 36% want their employers to increase the amount they pay in automatically by a little each year.

The research also found that just 17% of respondents would turn to their employer for guidance on pensions, while 25% would go to an independent financial adviser.

When asked about how comfortable they would feel in retirement if they made the minimum contribution of 8% required under auto-enrolment, just 18% of respondents felt they would be able to live comfortably.

In addition, 38% felt they would have a basic but acceptable standard of living, and a further 22% did not know.

Yet when asked whether their employer’s pension scheme was a reason to remain in their current jobs, 30% of respondents said it was a major incentive, a rise of 5% from 2013.

Lynn Graves, head of business development, corporate pensions at Scottish Widows, said: “Auto-enrolment has undoubtedly transformed the financial futures of a generation of employees and employers should be applauded for the role they have played in allowing it to enjoy so much success so far.

“However, as we mark the second anniversary of the introduction of the legislation, it is important that employers now listen to demands from their employees to fulfil their responsibility and ensure they have all the tools at their disposal to make the right decisions about their savings.

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”While we have clearly come on in leaps and bounds in getting people to think about their retirement, it is important that employees are made aware of the need to be saving above the minimum amount if they want to truly safeguard their finances for later life.”