AXA

New research from AXA suggests that 28% of employees have not or will not join their company pension scheme. This represents some 5.1 million British workers who, despite being entitled to join a company pension, fail to do so even though many employers will contribute on their behalf.

The study revealed that millions of Britons are losing out financially by failing to take advantage of occupational pensions. Nearly two thirds (63%) of those who are members of company schemes say they are aware that their employer pays into the fund on their behalf. Indeed a quarter of company pension scheme members (25%) say their employer pays between 5% - 10% of their salary into the fund, whilst just over one in ten get more than 10% of their annual salary paid into a pension pot by their employer each year. However, 30% do not know if there is an employer contribution to their pension scheme.

Despite this incentive, a staggering 28% of British workers who have failed to join company pension schemes said nothing would encourage them to do so, with 13% saying they have no faith in pensions anyway.

However, only 2% believe they will be able to rely on the State pension to provide an adequate retirement income, compared to more than half (55%) of company pension scheme members who are confident their pension scheme will fund a comfortable retirement.

Mark Rowlands, Business Development and Marketing Director at AXA Corporate Benefit Solutions said, "The harsh reality is that the State pension is unlikely to provide a sufficient income to enable most people to enjoy a comfortable retirement.

"Our study reveals that the majority of people who are members of occupational pension schemes benefit from contributions paid into these schemes by their employers and in many cases these contributions are equivalent to 5% or more of their annual income. By failing to join company pension schemes British workers are losing out financially. My conservative guess is that they could be losing out by as much as £3 billion per year and probably significantly more."

"We strongly encourage people to review their retirement planning and joining an occupational pension scheme could be an excellent way for British workers to boost their retirement income."

Of those who have failed to pay into occupational pensions, 11% said they could not afford to join, 7% said there was no point as they were too old and a further 7% said they either did not know how to join or had received no information on how to do so.

Brief summary of findings

• 28% of employees have not or will not join their company pension scheme.
• 63% of those who are members of company schemes saying their employer pays into the fund on their behalf
• A quarter of company pension scheme members (25%) say their employer pays between 5% - 10% of their salary into their pension scheme
• 30% do not know if there is an employer contribution to their pension scheme
• 28% of British workers who have failed to join company pension schemes said nothing would encourage them to do so
• 13% of respondents say they have no faith in pensions anyway
• 2% of respondents believe they will be able to rely on the State pension
• More than half (55%) of company pension scheme members who are confident their pension scheme will fund a comfortable retirement
• 11% said they could not afford to join their company pension scheme
• 7% said there was no point in joining their company pension scheme as they were too old
• 7% of respondents said they either did not know how to join their scheme or had received no information on how to do so.

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