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Workers passing up ‘free money’

Workers passing up ‘free money’

Category: Pensions

Updated: 22/11/2011
First Published: 05/10/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Millions of workers are passing up 'free money' by shunning company pension schemes.

Almost half of British workers are not currently signed up to their company's pension, research from Zurich has found.

More than one in five (22%) have taken the conscious decision not to save into a company pension, despite the fact that the vast majority of businesses top up their employees' pension pots with their own contributions.

Another 14% of workers are not aware that their company offers a pension scheme, suggesting that many firms are not doing enough to publicise their initiatives.

Of those who chose not to join, half say they cannot afford it, one in four (25%) think retirement is too far away to worry about and one in five (22%) prefer to invest in something else.

Those not in the scheme are choosing to save in banks and building societies (46%), property (41%), ISAs (34%) and stocks and shares (17%).

However, more than half (52%) of those who don't take up the company pension believe that the state pension won't be sufficient or available when they retire.

"It seems that people don't understand the real benefits of having a workplace pension," said Simon Foster, head of corporate pensions at Zurich UK .

"Firstly it's a tax efficient way of saving, and secondly it's a way of getting free money from your employer who, in most cases, puts money into the pension for you.

"Research shows that over half of people don't believe that the state pension will be sufficient or available when they retire, yet nearly half of workers are still not taking advantage of their workplace pension."

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