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Simpler pension funds can encourage retirement saving
HR News |
21/12/2011
Employees want new methods for managing complex retirement savings, a new study has indicated.
A study conducted by Aviva found that workers are struggling to manage their pensions savings because they are scattered across numerous employers in small workplace pots.
Some 49 per cent of workers have multiple pension pots, and 58 per cent do not know their overall value, researchers found.
Two in three people (67 per cent) said it was 'important' or 'very important' to see all their pension savings in one place, and 64 per cent were in favour of consolidating their various pots into one single fund.
Of those surveyed, 96 per cent said they would be much more likely to do so if there was a simple system in place.
Paul Goodwin, director of workplace pensions at Aviva, commented that UK workers want to be able to easily manage their retirement savings and see the value of their total pension pot in one place.
"There is a constant drumbeat about people not saving for retirement, which is valid," he stated.
"However, when you cannot track your savings in a simple way, it's very hard to know how much more you actually need for your retirement."
Mr Goodwin claimed that with auto-enrolment being introduced from next year, there is even more opportunity to encourage employees to actively save into a pension.
"However, we also need to recognise that those employees benefiting most from auto-enrolment, largely those on lower salaries, may also be left with a number of small pots," he added.
"A simple solution for those in auto-enrolled schemes would be to allow automatic transfers between similar auto-enrolled schemes so that an employee's pension follows them as they move jobs."
Posted by John Lynes
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