Globally, people expect workplace retirement plans to fund only 24% of their overall retirement income. People in the UK people expect more than a third (34%) of their retirement income to come from workplace pensions, second only to the Netherlands (37%). The state pension plays an important part in providing an income in retirement in many countries, with people in the UK expecting it to fund 40% of their income, compared to nearly half (46%) globally. In five of the 15 countries surveyed, people expect more the half of their retirement income to be funded by government benefits: Spain 66%, Hungary 57%, Poland 56%, Germany 53% and Japan 52%. “Our findings repeatedly show that workers in the UK place great emphasis on workplace pensions in helping them to build their retirement income. Saving in a pension through your employer has become a natural part of working life in the UK today, with people embracing saving in this way. There’s also a growing appreciation that the level of retirement income is dependent on the contributions individuals and their employer make throughout their career, leading to a desire to pay more. There’s also strong feeling that employers should contribute into a workplace pension with 82% of UK workers saying they should. There’s some concern that increasing auto enrolment contributions for employees would result in some people stopping their contributions. However, our research is a strong endorsement that not only will people take the increases in their stride, they’re realistic to appreciate that a comfortable retirement requires saving at higher rates and are prepared to pay more. While young people face many financial pressures, it’s encouraging that many are willing to save more and regular saving from a young age will set them up well in the long run. “Across the globe people are expected to take on greater individual responsibility to save for retirement. As the reliance on governments shifts, we need to ensure that access to saving is universal, allowing employed workers to save for retirement as well as alternative arrangements for the self-employed and those not in the workforce.” Kate Smith, head of pensions at Aegon, commented:
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2 million ‘multi-jobbers’ missing out on auto enrolment 11 June 2018
A recent report from Scottish Widows shows that nearly two million ‘multi-jobbers’ – people with more than one job – are missing out on over £90 million a year in employer contributions because of the policy on auto enrolment thresholds.
Scottish Widows’ 14th annual Retirement Report focuses on the impact auto-enrolment has had on the nation’s savings habits – is the initiative helping more people to save enough for the retirement they want?
The research highlights the issue that the £10,000 auto-enrolment threshold for earnings causes for the group of workers with more than one job whose total earnings may exceed the threshold, but do not with an individual employer. Multi-jobbers, who are often working full-time hours, are unfairly missing out on pension contributions for their overall earnings due to their income being split across different employers, thus falling foul of minimum earnings threshold for enrolment. Scottish Widows projections, using the latest ONS figures, show that 1,831,127 multi-jobbers have at least one job that earns under £10,000 and is not enrolled in the company’s pension scheme. Based on the average salary from these jobs, collectively over £90 million of employer contributions a year could be claimed if the auto-enrolment threshold was scrapped.
CIPP comment In December 2017 the The Department for Work and Pensions (DWP) published their analytical report which set out the analysis and findings used to inform the Automatic enrolment review 2017. Two major proposals were in this report
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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