Many unaware of automatic enrolment

More than half of workers have no idea that they will automatically be enrolled into a pension scheme from October next year if they do not already belong to one.

Around 57 per cent of people were unaware that new rules were due to come in, under which companies had to enrol their staff into either their own scheme or the Government-created National Employment Saving Trust (Nest) from October 2012, according to high street bank HSBC.

The figure was even higher among lower-paid workers, who are the most likely group to not currently be contributing to a pension, with 67 per cent of people earning up to £18,500 unaware of the changes.

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The group warned that workers could be in for a shock when the changes come in, as they will have to contribute 3 per cent of their pay to a pension, the equivalent of £56 a month for someone on a £22,000 salary, although people will have the right to opt out once they have been auto-enrolled.

The scheme is being set up in a bid to get the estimated seven million Britons who are not saving enough for their retirement to set aside more. It was first suggested by chairman of the Financial Services Authority Lord Turner, when he was head of the Pensions Commission.

Under the new rules employers will also have to contribute 4 per cent of staff’s pay to a pension scheme, while the Government will pay in a further 1 per cent.

David Wells, head of investments, pensions and savings at HSBC, said: “Nest is a low-cost pension scheme and will help people save more for their retirement.”