Omnium Employee Benefits

Workplace savings to fund "32% of retirement income"

People in the UK are expecting almost a third (32%) of their retirement income to come from workplace savings, according to a recent study.

Aegon polled 14,400 workers and found a further 42% expected their income to come from the government, with the remaining 26% coming from their own savings and investments.

Those aged 18 to 24 expect a lower portion of their retirement income (35%) to come from government benefits, such as the state pension, compared to those who’ve already retired (50%).

Being optimistic or possibly naive, people in this age group still expect to retire at the age of 65. 

The UK government is gradually increasing the state pension age to 68 by 2039, with the result that those born between 06 April 1970 and 05 April 1978 will have to remain in employment for an extra year before receiving their retirement income. 

Steven Cameron, Pensions Director at Aegon, said:

“The UK’s solution to focus on workplace savings makes it world leading, whereas its decision to increase state pension age is likely to mean expectations from the state pillar remain below the international average."

The benefits of auto-enrolment and workplace pensions

The introduction of auto-enrolment in 2012 means that the majority of employees will now be saving into a workplace pension. The legislation now ensures all Eligible Jobholders are automatically enrolled into their employer’s scheme, with no form-filling and no requirement to make any decisions regarding their investment fund.

Employees also benefit from compulsory employer contributions to these schemes as well as tax relief from the government, with their personal contributions coming direct from their pay packet.

Minimum workplace pensions contributions are currently set at 2% in total for employee and employer contributions. However, these are set to rise in stages over the next two years, reaching a combined minimum of 8% in April 2019, making workplace pensions more attractive than ever.

Get in touch

Give us a call today on 01483 205890 to discuss the benefits of implementing a workplace pension scheme or other employee benefits for your workforce.

 

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