Enable’s experienced IFA’s of Bishop’s Stortford is in favour of mandatory pension contributions as are two-thirds of British adults according to some new research. The data was gathered from pensions consultants LCP and research analysts YouGov. In addition, the figures suggest that for those aged 55 or over compulsory pension saving is an even better idea as those in favour rises to over three quarters 78% to be exact. Saving for your pension as soon as possible but the report shows a gulf between younger and older generations, highlighting the potential perception gap that exists between what people think is sufficient for a comfortable retirement, versus what may actually be necessary.
But if the UK were to fully embrace compulsory pension payment and mirror the Australian model, a system of compulsory contributions from both employers and employees things could be better for everyone. In Australian savers are also encouraged to supplement their compulsory contributions with further, voluntary contributions.
“Our research suggests that people on the whole support compulsion in retirement savings help them achieve greater financial security.” Said Bob Scott, senior partner at LCP. “Auto-enrolment has been hugely successful in getting millions of more people saving for their retirement. “But there is still some way to go. “Auto-enrolment does not include low earners or the self-employed which means that there are still more than 10 million private sector workers who are excluded.” The survey also asked those who thought pension saving should be compulsory what the minimum employee contribution should be. 43% thought that the minimum someone should personally pay into their pension was 3-5% of their monthly salary; while around a quarter (26%) thought the minimum contribution should be 6-10%. If you are looking at your financial planning and want to review your savings and or your pension payment Enable’s IFA’s can help you explore what is best for you.