Most workers back pension reforms

£10 pounds on iceAround two-thirds of workers who do not currently have a pension generally support landmark reforms which will automatically place them into schemes, a report has found.

The report from Nest, which is a low-cost pension scheme set up to play a key part in the plans, found that 63% of people agree with the idea of automatic enrolment.

The report focused on the two-thirds of people working in the private sector who do not currently save into a pension and who have an average salary of £20,000 a year, which is around £10,000 less than those who do pay into a pension.

Only 14% of workers who do not currently have a pension are reasonably confident that their retirement plans would be adequate, but one third said that all the money they earn is already swallowed up by basic living costs.

Around 10 million people will eventually be placed into workplace pensions as a result of Government efforts to tackle the pension savings crisis. The six-year process began last autumn with larger firms.

Nest (National Employment Savings Trust) was set up as a low-cost, not-for-profit option to fill gaps in the existing market, but there have been calls this week for rules surrounding Nest to be relaxed.

Its Taking the Temperature of Automatic Enrolment "insight" report follows previous Government findings that 70% of people will definitely or probably stay in a scheme once they have been automatically enrolled, 15% will definitely opt out and a further 15% are undecided.

Tom McPhail, head of pensions research at financial services firm Hargreaves Lansdown, said: "Just 63% of consumers have bought into the idea of auto-enrolment, which shows that there is still a considerable amount of work to be done in convincing individuals of the benefit of saving for retirement."

He also commented on findings from the report that 67% of people agreed that auto-enrolment would mean they could stop worrying that they had not done anything about their retirement.

Mr McPhail said: "The problem here is that for most people, the default auto-enrolment contributions will almost certainly not deliver a pension which will meet their expectations."
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