The research shows that 41 per cent of UK consumers believe the government should be responsible for ensuring people have good pensions provision to help them enjoy a comfortable retirement. The worrying reality is however that less than one in five, only 17 per cent, of consumers actually trust the government to help them make sufficient arrangements for retirement.
The research further reveals that almost a third of UK consumers (27 per cent) only trust themselves to ensure that they make adequate provision for retirement. After themselves, consumers trusted Independent Financial Advisers (22 per cent), employers (18 per cent) and pension providers (13 per cent). Despite, this strong emphasis on self-reliance the survey also showed that approximately 12.14 million* (33 per cent) people of working age in the UK had made no pension provision.
Of those people who had made no provision for their retirement, the majority (55 per cent) said they didn’t earn enough to pay into a pension. However, 15 per cent said they were worried about making the wrong choice, 12 per cent said they were too young and - most worryingly - 7 per cent said they simply couldn’t be bothered.
In addition to worrying about having insufficient money to enjoy their old age, the most concerning aspects of peoples’ retirement finances were having to work in retirement (17 per cent) and having to rely on the state pension for the majority of their income (17 per cent).
These worries were prompted by getting older (28 per cent), newspaper coverage of the pensions crisis (26 per cent) and government announcements about the state pension (24 per cent).Of those respondents who were worried about their retirement, 28 per cent said their fears had caused them to start a pension, 22 per cent had researched pension options and 24 per cent had started a savings account.
Pension Provision:
The most popular vehicle for retirement saving was pensions (53 per cent) followed by tax efficient savings plans (15 per cent), ordinary savings accounts (11 per cent), bonds / equity funds (7 per cent) and property (7 per cent).7 per cent of those who had made some sort of provision for retirement intended to use equity release on their own property.
Dean Mirfin, business development director at Key Retirement Solutions commented: “When we commissioned this research, we had hoped it would show that consumers had heeded the warnings from the government as well as the financial services industry about the impending pensions crisis to heart.Whilst fear may have driven some people to start a pension, the concerns are not diminishing. We believe that there are now over 12million* people of working age in the UK without any pension provision at all.
“Although these statistics also show that 67 per cent of people have put aside some money for retirement, it is also concerning to note that many peoples’ pension pots are unlikely to be sufficient for a comfortable retirement. We believe that this deficit will see people being forced to work longer, lead more frugal retirements and look to newer methods of retirement funding such as equity release.
“It is worrying to discover that while consumers feel that the government should ensure that they have good pensions, they don’t trust the establishment to help them make sufficient provision.People are more inclined to trust IFAs, which will be a boost for many in the financial services industry who are working hard to promote this level of trust.”
* = 33 per cent of people in this survey had made no pension provision. 33 per cent of 36.7932 million (population of working age using data from ‘Population Predictions for United Kingdom’ from the Office of National Statistics) is 12.19 million.
