New Government figures suggest most people will stay in a pension scheme and start saving for their old age under automatic enrolment.
The Department for Work and Pensions today (Monday) publishes its latest survey on retirement saving, Attitudes to pensions: The 2012 survey. The research shows nearly three quarters (70 per cent) say they are likely to stay in a pension scheme if they are eligible to be automatically enrolled.
The survey of 1,949 adults across Great Britain also highlights the need for pensions people can understand.
The research shows that many people find pensions too complex. Almost two-thirds (59 per cent) do not feel they know enough about pensions to decide with confidence how to save for retirement. Two-fifths (41 per cent) of respondents with a private pension have no knowledge of what their income will be in retirement, this rises to four-fifths (79 per cent) for those without a private pension.
Minister for Pensions Steve Webb said:
Automatic enrolment is helping millions to save for the first time and this survey shows most people will “stay in” when they are offered the chance to save in a pension. The simple fact of being offered a company pension is a clear driver to helping people save.
However, too many people are put off saving for their old age by a pensions system which is too complex and too few know clearly what they will get when they retire.
We are taking the hassle out of saving in a pension through automatic enrolment, we are working with the industry to restore trust and confidence in pensions and we will reform the state pension to make it simpler and clearer to understand.
Last week the Department published its proposals to reverse nearly half a century of declining membership in workplace pensions. The Reinvigorating Workplace Pensions paper contained new ideas for sharing the risks more equally between employer and employee, and for helping people get the most out of what they save in a pension.
Further findings in the survey include:
There is a particular need for young people to think about their pensions and the kind of future they would like to have. A fifth (19 per cent) of all people with no pension provision gave the excuse that it’s just too early to start. Among young people aged 18 to 24, two-fifths (39 per cent) said they actively avoid thinking about retirement altogether.
Gender is shown as a factor in pension saving. In particular, older women are more likely than men not to have any savings for later life. A high proportion of women (71 per cent) said they found pensions complex and almost a third (28 per cent) admitted they are scared of dealing with them.
Fear of not having enough in retirement is the key reason people gave for saving into a pension (32 per cent), followed closely by qualifying to join a company scheme (28 per cent) and starting work (23 per cent).
Notes to Editors:
- The survey was carried out between February and June 2012 for the DWP by TNS-BMRB
- It follows previous surveys in 2006 and 2009
- A full copy of the Survey
- Older people make up a larger proportion of the UK population than ever before, and every year the Department for Work and Pensions spends £100 billion on pensioner benefits.
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