MANY young workers in Yorkshire could be facing hardship in old age because they are not paying enough into their pensions, it was claimed yesterday.
Staff need to be taught about how much cash they need to save in order to enjoy a comfortable retirement, according to wealth management business Pearson Jones.
Pearson Jones is handling the implementation of scores of auto-enrolment pension schemes across the UK.
Peter Heckingbottom, the deputy managing director and investment director at Leeds-based Pearson Jones, said that the second stage of auto-enrolment is “desperately needed” to prevent a generation having their hopes dashed on retirement.
His comments follow the issuing of The Pensions Regulator’s report which states that nearly three million people have signed up to auto-enrolment,
Under automatic enrolment, which started in October 2012, a slice of an employee’s pay is automatically diverted to a pensions savings pot if they are aged 22 or more and earn at least £9,440 a year.
Bosses are also obliged to pay in, with the Government adding extra through tax relief.
Pearson Jones, which is in the process of carrying out auto enrolment for scores of SMEs (small and medium-sized enterprises) including recruitment agencies, charities and care home operators, warns that staff are often only paying “lip service” to the scheme.
Mr Heckingbottom added: “There has been widespread apathy among workers to save for their retirement for many years, and this is borne out by the latest wave of auto enrolment.
“As an IFA (independent financial adviser), I know only too well that my client bank in Yorkshire is full of affluent retired people who have saved during their working lives and are now living a happy retirement.
“I also know that my client bank is devoid of younger savers putting money away for their future.
“Young people today, wherever they work, have student loans, mortgages on high loan to value ratios and, despite low interest rates, most appear to not be repaying debt, never mind saving for their retirement.”