The auto-enrolment of workers into workplace pension schemes in the United Kingdom is the biggest reform to pensions for a century, according to the Chartered Institute of Personnel and Development (CIPD), and yet 53 per cent of workers are totally unaware of the changes.
The pension reforms — which are due to come into effect in October 2012 — will have the greatest impact on the private and voluntary sectors, with 46 per cent and 42 per cent, respectively, stating they are aware of the changes, found a CIPD survey of 2,013 employees.
Among the private sector, those working in the finance sector (57 per cent), followed by construction (54 per cent) and professional services (50 per cent) are most aware of the reforms, said Employee Outlook: Focus on Pay and Pensions.
Awareness of the reforms increases with age. Among the 18 to 24 age group, 31 per cent of private and voluntary sector workers are aware of the changes, increasing to 40 per cent among the 25 to 34 age group. The employees most aware are those aged 55 and over (57 per cent) and those between 45 to 54 years of age (45 per cent). A similar pattern is found by level of seniority, with those in non-managerial roles being less aware than those in managerial roles, found CIPD.
"These findings suggest that both the government and employers need to take a nuanced approach to communicating pension reforms to employees. With less than a year-and-a-half to go, employee awareness is generally quite low,” said Charles Cotton, CIPD adviser for performance and reward.
"We can see the greatest challenge to communicating the reforms is among the young. A more targeted effort in communicating the changes to this group is needed to ensure they understand how the reforms will directly benefit them. The danger is that a cheap and cheerful one-size-fits-all communication approach could end up costing the government more in the long-term through a lower understanding and appreciation of retirement savings.”