Employees are becoming increasingly nervous about the extra expense of personal accounts, which come into force from 2012.
Under this system, workers who aren't currently contributing to a company pension will be automatically enrolled into a government-sponsored saving scheme. They will be expected to pay in 4 per cent of their salary and this will be topped up by a 3 per cent employer contribution and 1 per cent from the Government in tax relief.
The idea of personal accounts is to assist in ensuring a decent retirement for the estimated 12 million workers who are not saving enough. But a survey conducted by B&CE Benefits Schemes, which helps manage a large number of workplace pension schemes, found that 28 per cent of workers thought they couldn't afford the 4 per cent contribution.
The last time B&CE asked the same question, last February, just 19 per cent of respondents felt they had something to worry about. The increasing unease is not surprising given the worsening economy, the fallout from the credit crunch and the fears for family finances sparked by rising fuel and food costs. "When money is tight, there are always more pressing things to do with your wages than put them in a pension," said John Jory, deputy chief executive at B&CE.
Just over a third of workers who are not saving for retirement reported that the cost of living prevents them from doing so. Financial commitments such as paying bills and meeting large mortgage repayments were specifically blamed by 10 per cent. But there is still strong support for personal accounts: two out of three workers surveyed said that they welcomed the Government's plan for auto-enrolment.Reuse content