Pensions remain the most important employee benefit on top of salary that an employer can offer, a study has found.
This is despite more than one-third of workers (38%) worrying their own pension funds would be inadequate during their retirement, a survey carried out by the National Association of Pensions Funds (NAPF) has revealed.
Nearly four in 10 workers (38%) cited pensions as the most popular benefit, swiftly followed by a bonus (19%) and flexible working (13%), the study of 1,248 workers found.
However, the figures – which suggest the total reward package offered is more important than just the basic salary – highlight the growing anxiety among employees that their pension will not give them enough money in their retirement.
A further one-quarter of people (26%) said they would like a guarantee that their pension income would not run out before they died.
NAPF director of policy Nigel Peaple said: “It is clear that people greatly value pensions. More than three-quarters value an employer more if they offer a workplace pension.”
The findings come as employee benefits firm Aon reported a 22% rise in the number of people retiring early in January 2010, compared to September last year. This could be due to the minimum pension age rising from 50 to 55 on 6 April, leading many people between 50-54 to retire now while they still can, the firm said.
Aon, which analysed a sample of 350,000 scheme members from 35 pension schemes, also noted a high volume of retirement quotations continued into January.
Forced retirement
Meanwhile, the number of people forced to retire during the recession has shot up fourfold, according to an age campaign group.
A survey by charities Age Concern and Help the Aged found that 100,000 workers were made to leave their jobs in 2009 because they reached the default retirement age of 65. In 2008 and 2007, an average of 25,000 people a year were forced to retire, according to research based on interviews with 976 over-60s.
The charities – soon to be rebranded Age UK – challenged all political parties to commit to scrapping forced retirement. An amendment to the Equality Bill was ditched again last week as the House of Lords insisted it was up to the government to either remove or raise the retirement age.
Michelle Mitchell, Age Concern and Help the Aged charity director, blamed the growth in forced retirement on employers trying to cut costs during the financial crisis. She said: “Our survey clearly shows the use of forced retirement has spiralled out of control, offering some employers a low-cost shortcut to shed jobs during the recession.
“The default retirement age (DRA) has stamped an expiry date on hundreds of thousands of older workers. It’s the most disturbing example of age discrimination which still tarnishes later life for so many people.”
The DRA was introduced in 2006 as part of new anti-age discrimination legislation.
More than half a million (530,000) 60-plus older employees work for organisations that use the DRA, the charities said. A quarter of a million workers aged 60 to 64 (250,000) believed it was likely or certain that they would be forced to retire, the survey warned.
The government is currently reviewing evidence on the DRA and is expected to publish the findings of the review in the summer.
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