2005
(23/06/2005) Workers lose at least £2.3 billion a year by failing to join company pension schemes
British workers are missing out on an estimated £2.3 billion1 a year in employers´ pension contributions by failing to join company schemes, according to new research from AXA.
The figure could be as high as £5.6 billion because
- 30% of respondents who had not joined a scheme did not know if their employers contributed to their scheme and so have not been included in calculating the figure
- respondents who had yet to join and had indicated that they would join have also been ignored
The findings reveal that, despite average employer contributions estimated to be in the region of 5% of annual salary to defined contribution pension schemes*, 28% of those employees who are entitled to join any type of company pension have failed to do so.
Mark Rowlands Business Development & Marketing Director at AXA said, "It is sad that so many British workers fail to join company pension schemes. It is perhaps an indictment of the lack of effective communication between companies and their employees.
"Arguably company pension schemes are the best way to boost retirement income because they are a tax efficient way to save. So simple effective communication of the benefits would go a long way to addressing the problem of pension under-funding in the UK by encouraging take up.
"Given that so many employers in the UK are prepared to pay into these funds on behalf of employees, we strongly encourage people to take advantage of these schemes - failing to do so is tantamount to volunteering for a pay cut."
The survey also revealed that the majority of employees (63%) who had joined company pension schemes said their employer does pay into the company pension on their behalf.
- Ends -
Notes to Editors
1 Assumes a contribution rate of 5%2 on an average salary of £26,989 for full time employees and £8,388 for part-time employees
2 Source - ACA Pension Trends Survey 2005
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AXA is a world leader in financial protection. AXA's operations are diverse with major operations in Western Europe, North America and the Asia/Pacific area. AXA employs 120,000 staff and tied agents and, as of 31 December 2004, had €869 billion in assets under management. Reported total revenues for 2004 were approximately €72 billion. Our previous company performance is not a guide to how we may perform in the future.
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