Why don't we save? Because we don't have the money

The biggest reason for a failure to contribute to pension plans is not having the money to do so.

Aviva, the insurance firm, has released its second Working Lives report, analysing the sort of benefits businesses give their employees. One particular passage jumped out at me:

Almost half (45%) of employees who do not contribute to a scheme they are offered say they simply cannot afford it, 19% are repaying debts and 17% are saving for other things. Of interest, the number of workers who say they cannot afford to pay into a scheme has dropped 10 percentage points from 55% (Q2 2012) which suggests that while general finances remain tight, retirement saving is becoming more of a consideration.

The problem that Britons don't save for retirement plagues public policy, and novel solutions are forever being proposed. For instance, one of the responses to this report, from ILC-UK, called for Government and the pensions industry to "work together to develop and promote a savings rule of thumb similar to the ‘5-a-day’ healthy eating message."

But if Government needs to do one thing to boost the number of Brits saving for retirement, it's pretty clear that that one thing ought to be aiming to increase the incomes — or at least, the disposable income — of the poorest 45 per cent of the country. It's not a lack of responsibility that prevents them saving, it's a simple lack of funds.

(It's similarly not a lack of responsibility that a 19 per cent of employees decide to pay off debts rather than save in a pension; saving when you have interest-bearing debts is, as a rule of thumb, a stupid thing to do)

Those figures also only count for employees with a workplace pension scheme, an increasingly rare situation to be in. Such schemes typically involve employer matching of contributions, which makes it even more critical that employees feel they can afford to actually take the employer up on the offer. As with other in-kind compensation like healthcare or company cars, such benefits are usually a way for an employer to "top up" an otherwise-low salary. If it is disproportionately poorer employees aren't making the most of them, that hurts them twice over.

Of course, whether employees think they can afford to contribute into pensions is different from whether they can actually afford to. It may be that if the urgency of saving for retirement were properly impressed upon employees, they would be able to make savings in their daily lives elsewhere. But that's a very different proposition from merely reminding people that they ought to be saving more.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Tory Brexiter Daniel Hannan: Leave campaign never promised "radical decline" in immigration

The voters might not agree...

BBC Newsnight on Twitter

It was the Leave campaign's pledge to reduce EU immigration that won it the referendum. But Daniel Hannan struck a rather different tone on last night's Newsnight. "It means free movement of labour," the Conservative MEP said of the post-Brexit model he envisaged. An exasperated Evan Davis replied: “I’m sorry we’ve just been through three months of agony on the issue of immigration. The public have been led to believe that what they have voted for is an end to free movement." 

Hannan protested that EU migrants would lose "legal entitlements to live in other countries, to vote in other countries and to claim welfare and to have the same university tuition". But Davis wasn't backing down. "Why didn't you say this in the campaign? Why didn't you say in the campaign that you were wanting a scheme where we have free movement of labour? Come on, that's completely at odds with what the public think they have just voted for." 

Hannan concluded: "We never said there was going to be some radical decline ... we want a measure of control". Your Mole suspects many voters assumed otherwise. If immigration is barely changed, Hannan and others will soon be burned by the very fires they stoked. 

I'm a mole, innit.