New pensions crisis looms as half of brits dont have a pension

01 September 2014

 

  • 49% of Brits don’t have any kind of pension
  • Less than 1 in 4 have calculated and are making the contributions required for their pension
  • Less than 1 in 5 will reach their target pension as they think they’re too young to even think about it

01 September 2014: Great Britain is heading for a new pensions crisis as 49 per cent of the population admit to not having a pension and less than one in four (17 per cent) calculating and making the right provisions, according to new research released today by the Chartered Institute of Payroll Professional’s (CIPP) to mark the start of National Payroll Week.

Women were slightly worse than men in the new survey with just over 50 per cent (51%) admitting they didn’t have a pension. Most people were also completely relying on their employer to provide their pension provision.

It’s also not good news for the new work based pension reforms as almost half again didn’t know or didn’t understand anything about the changes that are coming in for many. Furthermore only a half of those that did know about the changes knew how much of a contribution they would be or are already making. Three per cent have already said they would be opting out of the scheme.

With the majority of respondents expecting an annual pension income of between £20,001 and £35,000 they would need to start putting aside at least 12% of their salary each year from the age of 22. Something that most won’t be able to do with 18 per cent in their twenties saying they are too young to even think about a pension.

Lindsay Melvin, CEO of the CIPP commented: “With pensions at the forefront of the government agenda due to the new work based pension regulations coming into force, these findings are extremely worrying.

“The extreme lack of awareness surrounding the new system coupled with the fact that such a significant amount of people don’t have any form of pension what so ever, private or work, will have a huge ripple effect later down the line when many start to reach pension age. Some people may even find that they can never fully retire if they carry on without giving their pension provision serious consideration.”

However it’s not all bad news with 41 per cent saying they would like the opportunity to save not only for their pension but also for a rainy day through their payroll. This is something many employers can offer through their local credit unions, and the CIPP is actively encouraging and supporting through activities such as National Payroll Week.”

For full details of the research you can download the full report below.

CIPP NPW14 Research paper - Saving for retirement

For more information on the CIPP and National Payroll Week, please visit www.cipp.org.uk