Pension auto-enrolment: Most people still in dark

If people paid as little attention to where they live as they do their pensions, most would never get a home at all.

Even in an environment where younger people are finding it ever more difficult to buy or rent a property, almost all are very focused on the issue, as politicians are likely to find out at the next general election. However, in a recent survey, between 75 per cent and 80 per cent of people said they had very little knowledge of the mandatory workplace pension scheme which is due to come into force next year.

The scheme, known as auto-enrolment, will see everyone between the ages of 23 and 60 who earns more than €20,000 a year and is not already signed up to a workplace/occupational pension scheme enrolled in the State-supervised retirement plan. That is expected to be about 750,000 workers.

Initially, workers will pay 1.5 per cent of salary, with the same coming from the employer and 0.5 per cent from the State. Over the first decade of the scheme, that contribution level will rise to 6 per cent each from worker and employer and 2 per cent from the State every year.

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The concept of almost every worker having a private pension is revolutionary in the Irish context but it really should not be “news” to anyone as the concept and planning has been going on now for 16 years, with plenty of publicity.

However, Standard Life’s Retirement Pulse found that close to half of the target audience – those currently working and not part of any pension scheme – said they were completely unaware of the plan.

Worryingly for Minister for Social Protection Heather Humphreys – who has already missed a number of deadlines on its introduction and now plans to bring it in as voters prepare for a general election – 84 per cent say they have not been given sufficient information about the scheme.

The only good news in the Standard Life survey was that almost 80 per cent of those asked said they would not exercise the option to walk away temporarily from the scheme after a six-month lock-in period.