CIPP warns UK employees to plan financially for retirement

15th September 2015 | News

More than a third of workers reaching the end of their working lives are not planning financially for their retirement, according to the Chartered Institute of Payroll Professional’s (CIPP) annual survey.

According to the survey results 36 per cent of those aged 51-60 admitted to having no pension provision at a time when auto-enrolment is very much at the forefront for SME owners.

Two-thirds (66 per cent) of 20-24 year-olds surveyed also admitted to having no pension plans, with 30 per cent of all survey respondents fearing their final pension pot is unlikely to be enough to live on at retirement.

Almost a quarter (24 per cent) believe they are too young to even worry about a pension.

The results – revealed as part of CIPP’s annual National Payroll Week (NPW) - will surely be a concern to the Government as it seeks to encourage employees to make better financial provisions for the future.

Lindsay Melvin, CEO, CIPP, said: “In these uncertain economic times we would hope most people are thinking about their future, but these results show over a third of those towards the end of their working lives are not planning financially for their retirement and some are not even sure they will have enough to live on.

“With the Government putting pensions at the forefront of its agenda it’s even more disturbing that so many people are taking a relaxed attitude.”

The National Payroll Week was devised to raise awareness of the role payroll can play in educating the nation and now appears to be the ideal time for businesses to assess their responsibilities regarding auto-enrolment.

Ian Dowd, marketing director, NGA Human Resources, said: “NPW is the perfect time for companies to look at where they stand in applying automatic enrolment legislation and evaluate the role payroll plays within their organisations.

“Payroll should be about much more than just making sure salaries are paid on time.

“This week, payroll professionals are encouraged to demonstrate their role within financial education and the wellbeing of employees.

“So it’s a great opportunity to show the positive impact payroll can have on employees and on the nation.”

While the survey reveals that more than half (55 per cent) of employees feel saving for the future through payroll is a good idea, more than a quarter (26 per cent) stated they are not currently offered any benefits through payroll deductions.

“It is clear to see the nation has a long way to go, but we must also consider the vital role employers play,” added Melvin.

“By educating and offering solutions, such as saving through credit unions and paying into a pension via your payroll, employers can help their workforce become more financially savvy.”