Exclusive: Young shun pension contributions
David Woods, October 17, 2008
Young employees are cutting their pension contributions due to the economic downturn.
According to a poll by Harris Interactive for HR magazine, 7% of 16-24 year olds said they had already reduced their pension contributions in order to offset price rises elsewhere. This compares to 5% of the workforce overall.
Of those aged between 45 and 54, almost half (46%) said they have no intention of making any changes to their pension contributions.
From 2012, the government intends to auto-enrol staff into pension schemes, but the same research shows 17% of employees aged between 16 and 24 are "somewhat likely" to opt out of a pension then, compared to 7% overall. Eight percent of 25-34s said they are "fairly likely" to opt out.
Commenting on the findings Deborah Cooper, principle at pensions consultancy Mercer, said: "If you ask any ages about pensions contributions, young people are always less likely to be interested in contributing than older people.
"At the moment people see is risk in the banking industry and are pushing ten pound notes under mattresses. The downturn could become a convenient excuse not to save."
For more on the state of pension contributions see the November issue of HR magazine, landing on desks in the first week of November.