Workplace report predicts “bleak old age” for private sector workers

News Article - 03 August 2011
Category: Business

A report from the Workplace Retirement Income Commission indicates up to nine million private sector workers face a "bleak old age" due to failing pension provisions.

The Commission concluded that these issues would affect as much as a third of the current UK workforce.

The crux of the report was that many people with private sector pension schemes are not saving enough for their retirement years.

Lord McFall, former chairman of the Treasury Committee, who was commissioned to investigate the state of the sector by the National Association of Pension Funds (NAPF), said: "Too many people are stuck in a complex, costly and inefficient system that relegates the consumer's interest to second place.

"On top of that, they simply are not saving enough to secure a decent retirement. People need to get more bang for their buck or they are not going to bother with a pension.

"Instead, they will end up spending today, ignoring tomorrow and scraping by in poverty on the state pension. The complacency of many in the pensions industry is alarming."

The report did not look into the state of public sector pensions, which are already subject to significant changes by the Government.

Changes to be implemented in 2012 will automatically enrol public sector workers into a pension scheme, unless they earn a wage below the threshold or they choose to opt out themselves.

A spokeswoman for the Department for Work and Pensions said it was "a priority for the Government" to ensure the private pensions sector adequately served its purpose.

She added: "We have already taken significant steps to reforming the system. We are consulting on simplifying the state pension to provide a clear foundation for saving, and people will start to be automatically enrolled into a workplace pension from October 2012, helping millions to save for the first time."

Private sector businesses can always do more to encourage employees to regularly pay into their pension funds. HR teams should provide colleagues with adequate information about schemes available to plan for tomorrow as well as today.

Article keywords: Workplace Retirement Income Commission, retirement, pensions, Department for Work and Pensions

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