Automatic pensions welcome but not enough, say workers
Three years on from the introduction of pension auto-enrolment, most people who have been automatically enrolled in their employer's scheme still do not feel confident they are saving enough for a comfortable retirement.
Although almost all respondents to a survey by Hargreaves Lansdown said they saw auto-enrolment as a welcome change, 61% worry they may not be saving enough - and just over half do not know where their money is being invested.
But as a means of getting people to save for retirement, auto-enrolment has largely been successful. Recent research by Fidelity found the idea of employer contributions - where your company matches your pension contributions - to be a stronger incentive to save into a pension than the prospect of receiving tax relief.
Currently you must pay at least 0.8% of your salary towards your pension, with your employer paying 1% and the government giving you a 0.2% top up - meaning that for every £80 you contribute, £200 will go into your pension.
These minimums will increase by stages to 4% from you, 3% from your employer and 1% in tax relief from October 2018.
Critics have long warned that these meagre figures are not enough to secure the income in retirement necessary for a comfortable lifestyle.
There are still 5.2 million people who are ineligible for auto-enrolment (because they either earn less than £10,000, are under the age of 22, or are over state pension age), and are therefore not saving into a pension.
"For all its success, auto-enrolment is leaving millions behind," says Hargreaves' Tom McPhail. "If we include the self-employed, there are around 10 million workers who are still not saving into a workplace pension; more work needs to be done to make sure they don't miss out."
People's understanding of pensions has also increased thanks to the auto-enrolment scheme.
However, experts have warned that proposed government changes could undo all this new-found understanding just when people are starting to warm to the idea of saving for retirement.
Government proposals include major changes to the way tax relief is paid on pensions - which could mean the introduction of a single rate of tax relief for all taxpayers, or the abolition of up-front tax relief altogether.