Almost half (44%) of respondents are unaware that they are entitled to tax relief on their workplace pension contributions, according to research by B&CE.
The research, which surveyed 1,002 UK adults, found that a further 38% did not know how their money would be invested by their pension provider.
It also found:
- 70% of respondents have a basic knowledge of pensions.
- 60% of respondents who consider themselves to have little financial knowledge said they are very risk averse, while only 30% of those with a good knowledge of finances said the same.
- 44% of respondents aged 56 to 60 claimed to have a good knowledge of pensions.
Jamie Fiveash, director of customer solutions at B&CE (pictured), said: “This research backs up our experience that knowledge and understanding of pensions is generally low. Even when people say they have a basic understanding of pensions, many do not realise they will receive tax relief on their contributions or even where those contributions will be been invested.
“For now, we need to get people saving towards their retirement and automatic-enrolment is helping to achieve this goal. Looking forward, we have a bigger challenge ahead of us.
“It’s essential that we improve levels of understanding, so that employees can make informed decisions about their future. We believe simple and engaging communications will be the key to meeting this challenge.”