High earners over £50k beat slump in retirement savings

Only high earners earning over £50,000 per annum and yet to join a pensions auto-enrolment scheme have increased the amount they are saving towards their retirement over the past year, the 2013 Scottish Widows Workplace Pensions Report has revealed. All other groups still to be enrolled in a workplace pension scheme saved less than the year before with the average contribution towards retirement savings falling by 24% year on year.Auto-enrolment has already seen over one million workers successfully enrolled in a workplace pension scheme, however the study of over 5,000 people showed that among those who are still to be auto-enrolled - around 8.6 million people across the UK - the amount they are willing to save each month has fallen on last year's levels in every salary bracket, bar the highest of £50,000+ per annum.In real terms this amounts to a drop from £67 a month in 2012 to just £51 this year.While the amounts are still above the minimum required contributions for automatic enrolment, they remain well below what is needed to match retirement aspirations.Even among those workers already paying into a Defined Contribution workplace pension scheme, a significant shortfall exists between the monthly savings employees (and their employers) are making and their desired income in retirement.This shortfall between current savings and desired annual income in retirement indicates that despite the positive impact of auto-enrolment, employees are still removed from the reality of retirement, says Scottish Widows.While awareness of auto-enrolment has increased from just over a third (39%) in 2012 to almost two thirds (65%) this year, there are still significant gaps in people's knowledge - even among those who have already been auto-enrolled into their workplace pension scheme.{desktop}{/desktop}{mobile}{/mobile}More than a quarter (28%) of those who have been auto-enrolled are unaware of how much they contribute and overall 44% of employees paying into their workplace pension scheme do not know how much their employer is contributing.Awareness remains particularly poor among those at whom the scheme is targeted, with one in five (21%) employees on an annual income of under £30,000 still not aware of the changes.Lynn Graves, head of business development, corporate pensions at Scottish Widows, said: "We cannot ignore the fundamental correlation between poor employee awareness of the scheme and the lack of understanding of the realities of retirement. The alarming fall in the amount that employees are willing to contribute only serves to highlight this."Over half of employees (57%) think their employer should provide general information about retirement planning, in addition to providing a workplace pension scheme. More than a third (37%) go further, demanding full financial advice from their employer.Despite this demand, the report showed that employers are currently one of the last places people turn to for advice. Less than one in five (18%) would go to their employer for advice about pensions, behind the FCA website (20%), pension providers (21%), and friends and family. While a quarter (25%) said they would consult an independent financial adviser, down 5% on 2012's figures.Ms Graves added: "Auto-enrolment is a vital tool for improving savings behaviours, but it cannot work in isolation to change the nation's attitudes to retirement."

High earners over £50k beat slump in retirement savings - report

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