Member Article

Leeds' Pearson Jones urges young people to pay more into auto-enrolment schemes

Younger workers in Yorkshire and the North East are not paying enough into auto-enrolment pensions, started by their employers, to avoid financial hardship in old age, a national wealth management company says.

The second stage of pensions auto-enrolment (AE), to educate staff on how much they should save for their pension needs to be introduced urgentlyto combat this, says wealth management business Pearson Jones.

Leeds-based pearson Jones is handling the implementation of scores of auto enrolment schemes throughout the UK.

Managing director and investment director at Pearson Jones, Peter Heckingbottom, (pictured) says that AE Stage Two is ‘desperately needed’ to prevent a generation having their hopes dashed on retirement.

His comments follow the issuing of The Pensions Regulator (TPR) report that nearly three million people have signed up to AEamid growing concern among professional advisers nationally that employee contributions are too small.

Under AE, 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 including recruitment agencies, charities and care home operators, says that staffare often only paying ‘lip-service’ to the scheme.

Peter Heckingbottom says: “There has been widespread apathy amongst workers to save for their retirement for many years and this is borne out by the latest wave of auto enrolment.

“As a practicing IFA, I know only too well that my client bank in Yorkshire is full of affluent retired people who have saved 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 not to be repaying debt, never mind saving for their retirement.Auto-enrolment is the first step in a two-pronged approach to reverse this trend.”

This was posted in Bdaily's Members' News section by Clare Burnett .