Planning for retirement often falls to the bottom of the list of priorities; it’s something we all know we should do, but like tax returns and cleaning the oven, we all avoid dealing with it for as long as possible. A recent survey by iCount revealed some interesting insight into the attitudes of young people towards saving for retirement.
One-thousand people in the UK between the ages of 18 and 24 were asked at what age, if applicable, do you think you personally should start/ should have started saving for retirement?’ Almost half of those surveyed (48%) chose the 20-29 age bracket and almost one quarter (24.9%) thought between the ages of 30 to 39 would be the best time to start saving for a pension.
Although these numbers indicate a good level of awareness, there is still more to be done to educate younger generations about the options available, particularly when those entering the workforce today can expect to wait until they are 70 before they can start claiming a state pension.
Reassuringly, only 1.4% of respondents thought they should start saving for retirement between the ages of 60-69, 13% thought they could leave it until 40-49 and a mere 3.4% chose 50-59. However, 9.3% were completely unsure. The good news is that the introduction of the compulsory state pension later this year will require everyone over the age of 20 and earning more than £10,000 per year to make steps towards saving for their pension. Putting it off will no longer be an option.
Many business owners already offer a workplace pension, but if not, they will need to be aware of any changes to the rules or risk suffering the consequences of non-compliance. This can incur a fixed penalty of £400, and increase at a daily rate of £10 to £10,000 depending on the number of employees.
Essential steps to prepare for the workplace pension
Starting this year, all workers in the UK will have to start making payments towards a pension, and all employers will have to provide a workplace pension. This applies to all businesses, whether you’re responsible for one or one-hundred employees. Even if you employ a nanny or home health care professional, you will still be responsible for ensuring they are enrolled for a workplace pension.
Step one: Find out your staging date using this online form. This will indicate when
Step two: Use the duties checker to find out if you are required to provide a workplace pension. You will need to know your PAYE reference, letter code and details about your employees such as age and annual earnings.
Step three: Once enrolled, you will need to re-enrol every three years. Any employees who are already enrolled on the scheme will need to be re-enrolled, and any new employees will need to be added. The employer is responsible for all communications with their employees and will have to choose re-enrollment dates.