Pensions saving should be enforced

By HELEN MONKS
Updated:

 

MORE THAN half of British adults want to see compulsory salary deductions into company pensions, according to research by Prudential. Around 62% of 1,000 individuals surveyed last month by the pensions company believe there ought to be mandatory contributions. Even more (75%) back bosses being made to make payments into their employees schemes.

Around 22% think people should be putting 9% to 10% of their salary into their company pension plan, while 19% thought bosses should also pay 9% to 10% of an employee's salary into their scheme.

The Pru said its findings suggest the message people need to take responsibility for their retirement finances seems to be well understood, with only 4% of people saying they thought the State should provide for them. It was surprised that nearly a quarter of adults would be willing to see 9% to 10% if their salaries deducted as a compulsory pension contribution.

Prudential business to business director Andy Briggs said: 'The strength of public backing for both employee and employer contribution came as something of a surprise. It makes sense to start as early as possible. Investing £100 a month from the age of 25 into a pension and retiring aged 65 would give you an annual retirement income of around £13,600. However, start ten years later and the amount could fall to just over half that, at around £6,980.'

The call for automatic deductions is most popular in the North East, Wales and East Anglia where more than seven out of ten of those interviewed back such a move. Only 19% of people said that individuals should be left to make their own retirement planning decisions.

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