Workers in the dark on pensions contributions

More than half of construction workers (57%) have no idea how much income they need to earn to live comfortably during retirement, according to a recent survey by pension provider B&CE.

The Pension Perceptions in Britain Today survey, which involved more than 1,000 telephone interviews with employees in the construction industry, also revealed that 52% of workers have never increased their pension contributions, with 49% stating that they would not work an extra three to five years to generate an improved income in retirement.

Only 41% of employees admitted that their long-term savings and investments will not provide an adequate income in retirement, with only a quarter of those surveyed knowingly saving into a recognised pension scheme.

Of those who did have an idea of what income is needed to achieve a comfortable retirement, it was felt that an annual salary of £21,300 was suitable.

However, those who provided this figure were only saving £132 gross a month, which would provide a yearly taxable pension sum of £8,230 for a pension starting at the age of 20, £5,440 for those aged 30, and £1,840 for those starting a pension aged 50.

On the employers’ side, B&CE surveyed a cross-section of 200 employers. This found that only 2% of companies plan to  introduce a contributory or non-contributory pension scheme in the next two years.

Ninety per cent of companies said there is no growing support at director level to introduce contributory pension scheme, while only 24% of businesses felt they had the expertise to provide staff with the right information about retirement planning.

The key barrier cited to providing financial planning information in the workplace is cost (64%), followed by an unwillingness to get involved in the advice process (34%).

 A total of 320,000 policies have been taken out for the B&CE’s stakeholder pension. Around 15% of members are making regular contributions, and three-out-of-five of these are being matched by their employer.