New analysis from EQ (Equiniti Group plc), one of the largest providers of outsourced pension administration in the UK, suggests that nearly half of full-time British workers “don’t realise that they are contributing to an occupational pension scheme.”
EQ said research conducted with over 2,000 adults found that just 48% of the UK’s full-time workers thought they were saving into a pension, despite ONS statistics showing that nearly nine in 10 eligible employees are making contributions to one.
“This means that millions of Brits who have been auto-enrolled into pension saving are unaware they are regularly paying into a pot through their employer and building up a fund that will support them through their retirement,” said EQ.
Duncan Watson, CEO of EQ’s pension business, said: “Auto-enrolment has revolutionised pension saving for millions of Brits who are now participating in their workplace scheme due to the opt-out system now in place.
“It is evident, however, that pension saving is still not on the radar of many people, even if they are actually making contributions to their retirement fund.
“The first step of the process is now complete – now focus should shift to encouraging employees to engage with the pension saving journey, increase awareness of the importance of increasing their contribution rates and maximising employer contributions.”
Previous EQ analysis of ONS figures found that preserved capital in defined contribution pensions has surged since the introduction of auto-enrolment, increasing from £139 billion in 2012-14 to £291 billion in 2016-18.
This indicates that many employees could face trouble in the future tracking down various pension pots that they have paid into during different jobs throughout their career, or if they fail to update their contact details with all the schemes they have participated in.
Watson believes the new Pensions Dashboard will go a long way to ensuring workers have a closer connection with their savings.
Watson added: “We are slowly tracking towards establishing a dashboard that will give employees the ability to see all their pots in one easy-to-use interface.
“This will be a substantial step-forward in saver engagement, but we urge all schemes to get ahead of the game and begin preparing their data for this major project.
“It will require a lot of work and for the sake of consumers, schemes should begin as soon as possible to avoid a last-minute dash to the finish line.”