Many workers are ignorant over impending reforms to pensions

Fewer than a third of those aged between 18 and 24 working in private firms and the voluntary sector were aware of the changes, a survey of 2,000 workers by the Chartered Institute of Personnel and Development (CIPD) revealed.

Older workers and those in management posts were most aware of the auto-enrolment, which CIPD said was the biggest reform to pensions for a century.

Charles Cotton, of CIPD, said: “These findings suggest that both the Government and employers need to take a nuanced approach to communicating pension reforms to employees. With less than a year to go, employee awareness is generally quite low.

“From our survey we can see the greatest challenge to communicating the reforms is among the young. A more targeted effort in communicating the changes to this group is needed to ensure they understand how the reforms will directly benefit them. The danger is that a cheap and cheerful one-size-fits-all communication approach could end up costing the Government more in the long term through a lower understanding and appreciation of retirement savings.”

A separate study for the Government showed that young workers were four times less likely than their older counterparts to join their employer’s pension scheme.

Pension participation was higher in the 45-54 age group, with around 58 per cent paying into a scheme, compared with 15 per cent of the younger workers.

Pensions minister Steve Webb said: “We need to inspire a culture of saving, where young people recognise the benefits of saving and start as early as possible. That is why the introduction of automatic enrolment will be so significant.”