One in four can ill afford planned pension scheme

More than one in four UK construction workers doubt they can afford the government’s new personal-account pension-saving scheme.

In a survey by financial advisers B&CE, 28% of UK workers doubted they could afford pension contributions automatically taken from personal accounts, as planned by the government.

Under the scheme, a small percentage – proposed at 4% - of a worker’s take-home salary would be automatically deducted from their personal account and put into a pension scheme. Workers would be able to opt out of the scheme, due to come into force in 2012.

A similar survey taken last February found that only 19% of workers either said that they couldn’t, or were unsure whether they could, afford the 4% contribution.

John Jory, deputy chief executive of B&CE, said: “We understand the saving needs of lower to moderate earners better than any other provider. If a scheme is going to be successful it has to have the support of both individuals and employers - we’ve shown this with our own stakeholder pension for the construction industry which offers a matching arrangement to encourage employees to save. People who save for their retirement should always be demonstrably better off than those who do not.”